TY - JOUR
T1 - Ecolabels and international trade in the textile and apparel market
AU - Nimon, W.
AU - Beghin, J.
N1 - Funding Information:
Journal paper No. J-18675 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa, Project No. 3566, was supported by the Hatch Act and State of Iowa funds.
Funding Information:
Without implicating them, the authors thank Peter Bloomfield, Jean-Christophe Bureau, Stephane Marette, Ray Palmquist, Kevin Smith, Dan Sumner, and Tom Vukina for discussion. The authors acknowledge financial support from USDA NRICGP Grant 9603068.
PY - 1999
Y1 - 1999
N2 - We provide a formal analysis of the welfare and trade implications of ecolabeling schemes. We couch our analysis in the context of a stylized model of the textiles market between an industrialized North and a developing South. Textiles ecolabeling involves production-process standards, raising concerns of protectionism against the South. We investigate several labeling scenarios (labeling by North, labeling by both North and South, and harmonization). We consider a large home country, the North, that imports conventional textile goods from the South and produces import-competing conventional textiles as well. Both the North and the South exhibit increasing marginal cost of textile production. Trade is initially distorted by the North's import tariff, as would be the case in the real world. In the absence of information on process standards, equilibrium in the textiles market does not allow 'green' credence attributes to emerge. Next, we review important stylized facts and issues associated with ecolabel schemes. Then we present a parsimonious model that incorporates these stylized facts. Following that, we analyze the two ecolabeling cases described previously and summarize numerical comparative-statics results pertaining to the harmonization of labels. Finally, we present conclusions.
AB - We provide a formal analysis of the welfare and trade implications of ecolabeling schemes. We couch our analysis in the context of a stylized model of the textiles market between an industrialized North and a developing South. Textiles ecolabeling involves production-process standards, raising concerns of protectionism against the South. We investigate several labeling scenarios (labeling by North, labeling by both North and South, and harmonization). We consider a large home country, the North, that imports conventional textile goods from the South and produces import-competing conventional textiles as well. Both the North and the South exhibit increasing marginal cost of textile production. Trade is initially distorted by the North's import tariff, as would be the case in the real world. In the absence of information on process standards, equilibrium in the textiles market does not allow 'green' credence attributes to emerge. Next, we review important stylized facts and issues associated with ecolabel schemes. Then we present a parsimonious model that incorporates these stylized facts. Following that, we analyze the two ecolabeling cases described previously and summarize numerical comparative-statics results pertaining to the harmonization of labels. Finally, we present conclusions.
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U2 - 10.2307/1244087
DO - 10.2307/1244087
M3 - Article
AN - SCOPUS:0033509942
SN - 0002-9092
VL - 81
SP - 1078
EP - 1083
JO - American Journal of Agricultural Economics
JF - American Journal of Agricultural Economics
IS - 5
ER -