ABSTRACT
This chapter investigates the impact of national environmental control policies on international trade and competitiveness among nations. The empirical analysis was based on a theoretical model which explains the direction, volume, and the pattern of trade flows. Utilizing this theoretical model, the chapter focused on examining the role of environmental control in determining the international competitiveness and the volume of trade flows. In the analysis, the introduction of environmental control as a cost factor produced different results for the two countries. It was found that overall environmental control costs differ among the industries both in Germany and in the United States. Further, the values of overall environmental control cost for German industries were greater than those of their US counterparts. The magnitude of these cost differences between the two countries varied among the industries. There is a scarcity of data in regard to environmental control costs.
