2002 World Congress of Environmental and Resource Economists

With the gradual accession of some Central and Eastern European Countries (CEECs) to the European Union (EU), international trade between the EU and CEECs will change because of free trade and mobility of production factors within the EU. This will have a clear impact on the environment both in the CEECs and the EU. This paper investigates the consequences of the enlargement of the EU on trade and environment by general equilibrium modeling. A general equilibrium model solved by the sequential joint maximization method is developed to examine the impacts under different environmental regimes. For illustrative purposes, the model is applied in a numerical example based on the available factor endowments with two regions (EU and CEECs) and two goods (pollution intensive good A and clean good B). The model is applied to study the effects of environmental constraints and mobility of labor on production and international trade. We show that the accession of Central and Eastern European countries will affect per capita utility in both regions. For given technology, as assumed in the paper, it is illustrated that labor mobility after accession will reduce utility per worker and income per worker in the former EU and will increase utility per worker and income per worker in CEECs.



	Paper Title:	Modeling The Effects Of The Enlargement Of The Eu On Trade And The Environment: An Applied General Equilibrium Modeling Approach
	Presenting Author:	Xueqin Zhu (Wageningen University and Research Center)
	Coauthor 1:	Ekko Van Ierland
	Coauthor 2:
	Coauthor 3:
	Abstract:	With the gradual accession of some Central and Eastern European Countries (CEECs) to the European Union (EU), international trade between the EU and CEECs will change because of free trade and mobility of production factors within the EU. This will have a clear impact on the environment both in the CEECs and the EU. This paper investigates the consequences of the enlargement of the EU on trade and environment by general equilibrium modeling. A general equilibrium model solved by the sequential joint maximization method is developed to examine the impacts under different environmental regimes. For illustrative purposes, the model is applied in a numerical example based on the available factor endowments with two regions (EU and CEECs) and two goods (pollution intensive good A and clean good B). The model is applied to study the effects of environmental constraints and mobility of labor on production and international trade. We show that the accession of Central and Eastern European countries will affect per capita utility in both regions. For given technology, as assumed in the paper, it is illustrated that labor mobility after accession will reduce utility per worker and income per worker in the former EU and will increase utility per worker and income per worker in CEECs.
	Link to paper:	Not available

	Session / Day / Time	2A / Monday / 10:15 - 11:45 am

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