The Effectiveness of Environmental Provisions in Regional Trade Agreements

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

International food trade and natural resources

“…This is especially the case when land governance is weak, either because of ill-defined property rights or prioritization of agricultural production over conservation (Torres et al, 2017). In fact, uncertainties about the impact of trade on deforestation have become a major stumbling block in the ratification of the EU-Mercosur trade agreement (Abman et al, 2021), although evidence of a direct link between trade and biodiversity loss remains limited.…”

“…Ideally, one would like a system of free trade -so that comparative advantages can allocate crop productions where natural resources have the lowest opportunity costs and are used most efficiently-combined with local conservation measures to ensure the protection of fragile environments and the elimination of negative externalities. Abman et al (2021) find that regional trade agreements with specific provisions aimed at limiting deforestation and biodiversity loss are an effective tool to limit the negative effects trade can have on the environment. This effect mainly works through a reduction in land use change following trade liberalization.…”

Pursuing Environmental and Social Objectives through Trade Agreements

“…Much of the economic and political science literature adopts a cross-PTA approach combined with a focus on a specific NTPO of interest when seeking to identify causal relationships. Examples include Baghdadi et al (2013), Abman and Lundberg (2020), Abman et al (2021), and Abman et al (2022) on environmental and air quality; Van den Putte (2015), Aissi et al (2018), andLundberg et al (2022) on labor and workers' rights and Zerk (2019) on civil and human rights. More recent studies focus on even more specific and narrowly defined non-trade outcome or performance measures, such as geolocated tree coverage (Abman et al, 2021).…”

“…Examples include Baghdadi et al (2013), Abman and Lundberg (2020), Abman et al (2021), and Abman et al (2022) on environmental and air quality; Van den Putte (2015), Aissi et al (2018), andLundberg et al (2022) on labor and workers' rights and Zerk (2019) on civil and human rights. More recent studies focus on even more specific and narrowly defined non-trade outcome or performance measures, such as geolocated tree coverage (Abman et al, 2021). 4 Most of the empirical studies in this area fail to apply methods that actually permit identification of a causal relationship between PTAs and NTPOs.…”

“…For instance,Abman et al (2021) explore the causal impact of enviromental provisions in PTAs, specifically looking at the impact of environmental protection obligations on forest coverage loss. Their estimates suggest that PTAs tend to increase pressure on the environment (especially, via deforestation in developing countries), although this negative impact can be at least partially offset by the inclusion of binding environmental protection obligations Tian et al (2022).…”