DO "GREEN" TRADE AGREEMENTS PRODUCE POSITIVE ENVIRONMENTAL OUTCOMES?

Abstract

Many preferential trade agreements (PTAs) today include highly detailed and extensive environmental provisions. These environmental provisions are in some cases even more stringent than those in multilateral environmental agreements. This paper investigates whether the environmental provisions in PTAs have resulted in positive environmental outcomes. To do so, this paper uses panel data analysis to estimate the e?ect of enacting PTAs with environmental provisions on three speci?c issue areas – deforestation, over-?shing and carbon emissions. Across these three issue areas, this paper ?nds no consistent evidence that the enactment of PTAs with environmental provisions led to substantial improvements in environmental outcomes. To account for these null results, this paper focused on domestic political economic considerations as an explanation. Domestic political economic considerations may outweigh obligations associated with environmental provision in PTAs. Consequently, countries either undertake minimal e?orts to ful?ll environmental provisions or possibly none at all. These arguments were further illustrated through the case study of the US-Peru Trade Promotion Agreement (PTPA), particularly, its failure to reduce deforestation rates in Peru despite having the most stringent provisions on forestry governance in any PTA to date. The ?ndings of this paper raise concerns about whether PTAs are appropriate as avenues for global environmental governance.