Multilateral Environmental Agreements and the WTOMay 12th, 2014
FiledMay 12th, 2014Rules promoting nondiscriminatory trade under the World Trade Organization (WTO), and its predecessor the General Agreement on Tariffs and Trade (GATT), may have a ‘chilling’ effect on participation in multilateral en- vironmental agreements (MEAs). This chilling effect may arise since many MEAs either directly distort trade or because MEAs use trade policy to induce cooperation and/or prevent so-called trade leakage. We investigate the empirical relevance of this chilling effect while simultaneously addressing two econometric difficulties: self-selection into the GATT/WTO and the difficulty of actually classifying GATT/WTO membership status. To do so, we employ a partial identification approach in order to bound the causal effect of GATT/WTO membership on participation in MEAs using country-level panel data. The analysis reveals a positive association between WTO membership and MEA participation in the absence of misclassification. However, under the assumptions considered here, one i