Environmental Effects of GATT/WTO Membership: An Empirical Evaluation

Abstract

One of the great questions for scholars of international relations and economics concerns the relationship between the World Trade Organization (WTO) and the natural environment. Does membership in the multilateral trade regime constrain environmental regulation and increase the environmental burden of national economies? Do countries pay a heavy environmental price for trade liberalization? Although this question has been debated extensively, there is little statistical evidence to contribute to the debate. We provide a comprehensive statistical analysis of the environmental effects of joining the multilateral trade regime. We collected data on a variety of environmental policies, institutions, and outcomes that should be influenced by GATT/WTO membership if the predictions of environmental pessimists or optimists are valid. A wide range of statistical models designed to identify the causal effect of the GATT/WTO on the environmental indicators shows that joining the GATT/WTO does not have negative effects on environmental quality.

Keywords: international trade, multilateral trade regime, World Trade Organization, international environmental policy, trade-environment nexus, globalization