Template-Type: ReDIF-Paper 1.0
Author-Name: Paul Missios
Author-X-Name-First: Paul
Author-X-Name-Last: Missios
Author-Email: pmissios@economics.ryerson.ca 
Author-Workplace-Name: Department of Economics, Ryerson University, Toronto, Canada
Author-Name: Ida Ferrara
Author-X-Name-First: Ida
Author-X-Name-Last: Ferrara
Author-Email: iferrara@yorku.ca
Author-Workplace-Name: DEpartment of Economics, York University, Toronto, Canada
Author-Name: Halis Murat Yildiz
Author-X-Name-First: Halis
Author-X-Name-Last: Yildiz
Author-Email: hyildiz@economics.ryerson.ca 
Author-Workplace-Name: Department of Economics, Ryerson University, Toronto, Canada

Title: Consumption Externalities, Product Quality, and the Role of National Treatment

Abstract: In Article III of the WTO, National Treatment limits domestic policy in an e¤ort
to curtail protectionist discrimination against foreign products. We examine National
Treatment when goods are vertically di¤erentiated and generate consumption external-
ities in two interdependent product markets, comparing quantity and price equilibria
under Article III with those prevailing in a world in which Article III does not apply.
While one may expect that high externalities would lead to a greater need for discrim-
inatory policies, we show this is often not the case and, furthermore, that National
Treatment can lead to a cleaner world environment.

Classification-JEL: F18, Q56, F12
Keywords: National Treatment; non-discrimination; environmental damages; consumption externalities; environmental policy; domestic policy; WTO.
Length: 56 pages
Creation-Date: 2015-09
Number: 048
File-URL: http://economics.ryerson.ca/workingpapers/wp048.pdf
File-Format: Application/pdf
Handle: RePEc:rye:wpaper:wp048