International Trade Between Consumer and Conservationist Countries

James Brander, M. Scott Taylor

NBER Working Paper No. 6006
Issued in April 1997
NBER Program(s):   ITI

We consider trade between a consumer' country with an open access renewable resource and a conservationist' country that regulates resource harvesting to maximize domestic steady-state utility. In what we call the mild overuse' case, the consumer country exports the resource good and suffers steady-state losses from trade, as suggested by the conventional wisdom' that weak resource management standards confer a competitive advantage on domestic firms in the resource sector but cause welfare losses. Strikingly, however, when the resource stock is most in jeopardy, the conservationist country exports the resource good in steady state and both countries experience gains from trade.

(546 K)

Published: Resource and Energy Economics, Vol. 19 (May 1997): 321-344.

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