ABSTRACT
Environmental legislation provides a means for the government to influence the competitiveness of an economy or of some of its sectors. Of course, there are environmental problems connected with the consumption of the goods, and they may have strong implications on international trade. In the public opinion, the term ecological dumping characterizes a situation in which the environmental standards in one country are lower than those in other countries. The preceding investigation was an attempt to give more economic content to the catchword of ecological dumping, which has been frequently used in the public discussion on environmental policy in open economies. Given the terms-of-trade effects of sector-specific environmental policies, the policy implications can easily be derived. Strategic trade policy and lobbying activities of the exporters are more successful in explaining ecological dumping. Applied to the real world, the interest group approach is the most promising for an explanation of ecological dumping.
