The paper employs a partial equilibrium model of international trade to derive optimal environmental policy responses to tariff reduction requirements and assesses the impact of such policies on social welfare. The domestically optimal policy adjustment for a large importing country committing...

This paper analyses how the enlargement of a trade bloc will affect national welfare. We establish a partial equilibrium model of a trade bloc either operating as a monopoly with a competitive fringe or facing a duopolistic game in production taxes/subsidies. Given this framework, we demonstrate...