© 2003 Kluwer Academic Publishers. Printed in the Netherlands. Trade and the Environment: A Survey of the

Abstract: This survey examines the rapidly growing literature on the links between environmental policy and international trade. The paper reviews the main questions and results in the literature and tries to point out their relationship and significance. For the purpose of this survey the literature has been grouped into four main themes. The first two of these are optimal policy towards local and transboundary pollution respectively. The third theme is the impact of trade liberalisation on environmental quality and welfare. The final theme is the political economy of the trade and environment nexus. 1