At the heart of the current debate between environmentalists and the trade
community lie differences of opinion about the impact that trade liberalization
has on environmental quality. This article reviews economists'evidence on the
physical trade-environment link. Contrary to interpretations from the trade
community, the evidence lends no support to claims that positive income effects
from economic expansion dominate negative scale effects. On the other hand,
the evidence does not support environmentalists' arguments that trade is a
significant source of environmental degradation, nor that trade liberalization
has induced significant international migration of dirty industries.
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