Trade Liberalization and Pollution Havens

31 Pages Posted: 7 Jul 2004 Last revised: 5 Oct 2014

See all articles by Josh Ederington

Josh Ederington

University of Kentucky - Department of Economics

Arik Levinson

Georgetown University - Department of Economics; National Bureau of Economic Research (NBER)

Jenny Minier

University of Kentucky - Department of Economics

Date Written: June 2004

Abstract

U.S. Presidential Executive Order 13141 commits the United States to a careful assessment and consideration of the environmental impacts of trade agreements.' The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through changes in the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. Indeed, in this paper we predict a substantial reduction in U.S. pollution from 1978-94 due entirely to a shift in the composition of U.S. manufacturing toward cleaner industries. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period; we conclude that no such connection exists. First, we find that a shift toward cleaner industries, similar to that observed in U.S. manufacturing, has also occurred among U.S. imports. Second, we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes over that time period.

Suggested Citation

Ederington, Josh and Levinson, Arik M. and Minier, Jenny, Trade Liberalization and Pollution Havens (June 2004). NBER Working Paper No. w10585. Available at SSRN: https://ssrn.com/abstract=559235

Josh Ederington

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

Arik M. Levinson (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-5571 (Phone)
202-687-6102 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jenny Minier

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

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