ABSTRACT
For most regions in the European Union (EU), environmental policies related to food and agriculture have been, or are being, formulated. This chapter discusses the possible impacts of these environmental policies on agricultural production and the balance of trade for the EU. It works from the current state of knowledge about economic linkages between environmental concerns and trade, as weak as it is. The chapter analyzes the policies and their effect on the basic supply/demand elements of the economic system and broadens economic understanding about the impact of environmental concerns on the balance of agricultural trade. Environmental policies have been shown to induce changes in technology, consumer attitudes, and institutions. So, a distinctive element of environmental policies is their potential effect on the basic supply/demand elements of the economic system. When environmental policies negatively affect the production of those products, the consequence can be a significant decrease in EU agricultural exports.
