Environmental outcomes in agriculture: the effects of environment-related provisions in regional trade agreements

The agriculture sector is both a contributor to global greenhouse gas (GHG) emissions and is affected by trade policies. As more and more regional trade agreements (RTAs) include environment-related provisions (ERPs), this technical note explores whether agriculture-related ERPs in RTAs are associated with reduced GHG emissions from agriculture. The research applies a novel dataset on ERPs related to the agriculture, forestry and fishery sectors (Ag-ERPs) to analyse this relationship in a panel of 195 countries and territories in RTAs notified to the World Trade Organization from 1995 to 2019.

The findings show that there is indeed a significant reduction in agriculture-related GHG emissions in countries that enter into RTAs with more Ag-ERPs with their relevant trading partners in agricultural products. A mediation analysis reveals that this association is partly driven by stricter domestic environmental regulation, and partly by a reduction in agricultural land use. However, a large part of the overall association between RTAs with more Ag-ERPs and the reduction in agriculture-related emissions is still unexplained by these two channels. This suggests that lower GHG emission production methods are implemented at given levels of domestic environmental regulation and agricultural land use in countries with more Ag-ERPs in their relevant RTAs.

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