Economic integration and environmental policy: Does NAFTA increase pollution?

Contrary to the wide-held perception that increased international competition will lead to the erosion of environmental standards we show that economic integration, such as NAFTA, may instead lead to tighter environmental control. In maximizing political support the administration will trade off some of the gains from trade liberalization accruing to both the export sector and labor for increasing support by the environmentalists and the losers of protection (i.e. the import sector). This is effected through tightened environmental control - NAFTA will result in higher environmental standards in the US.