What is it about?
This paper investigates the effects of a free trade agreement (FTA) with environmental provisions between northern and southern countries. We explicitly consider clean technology transfers from the North to the South and the enforcement levels of adopting clean technology in the South, which have not been discussed so far. Southern producers benefit greatly from having unimpeded access to a northern market, but they are reluctant to use new high-cost, clean technology provided by the North. We investigate how environmentally conscious northern countries could design an FTA in which southern countries are provided with sufficient membership benefits but follow tighter enforcement requirements. We provide a quantitative evaluation of FTA policies using a numerical example.
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Why is it important?
We investigate how northern countries could design an FTA with environmental provisions between northern and southern countries, in which southern countries are provided with sufficient membership benefits but follow tighter enforcement requirements. We demonstrate that bundling a free trade agreement with an environmental agreement between northern and southern countries would be beneficial in the presence of technology transfers and enforcement issues.
Perspectives
The future direction of this study will be one that explores the case of multiple northern countries taking these considerations into account. With multiple and heterogeneous northern countries, there might be conflicts of interest among them, and there may be trade between the northern countries. In addition, northern countries may have different positions on clean technology transfer to southern countries. There may be a case where one northern country has a patent for clean technology, whereas the other does not. Then, there are conflicts of interest in the FTA’s clean technology transfer policies to the south. These points require further examination.
Prof. (Associate) Minoru Nakada
Graduate School of Environmental Studies, Nagoya University
Read the Original
This page is a summary of: Free trade agreements with environmental provisions between asymmetric countries: transfer of clean technology and enforcement, Environmental Economics and Policy Studies, September 2023, Springer Science + Business Media,
DOI: 10.1007/s10018-023-00374-0.
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