Trade, Trees, and Contingent Trade Agreements

Arbeitspapier

Can trade agreements motivate environmental conservation? I first present a model whereby the government in the South expands its production capacity (e.g., deforest) before trading with the North. After deriving negative relationships between tariff reductions and conservation, I show how all negative results are reversed if countries can negotiate a contingent trade agreement (CTA), where default tariffs vary with changes in the production capacity (or forest cover). A calibration suggests that growth and liberalization can cause Brazil's agricultural area to expand by 27%, but this expansion can be avoided if the EU and the US offer a CTA.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9596

Classification and Topics

• Classification: Wirtschaft ; Trade and Environment ; Trade Policy; International Trade Organizations ; International Institutional Arrangements ; Nonrenewable Resources and Conservation: Issues in International Trade
• Subject: international trade ; trade agreements ; deforestation ; environmental conservation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harstad, Bård
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/252113
• Last update: 10.03.2025, 11:42 AM CET