Mixed results were obtained but over all the countries did benefit from low tariffs. Liu et al (2012) assessed the China-Japan-Korea Free Trade Agreement’s economic and environmental impacts on China. CJKFTA is predicted to lead to notable environmental impact, including increased emissions of agricultural total nitrogen, agricultural total phosphorus, chemical oxygen demand, and GHGs.
Economies integrate with free trade agreements to expand their trade. There are few literatures available on free trade agreements and its impact on economies. We have reviewed some of the famous studies on this topic as fllow: the empirical study (Liu et al, 2012) of free trade agreement among China, Japan and Korea (CJKFTA) demonstrates a positive relationship between tariff reduction and pollution emission including GHG emissions. The study reported a reduction in SO2 in industrial sector. The researcher used chain reaction method based on CGEM. A similar study (O’Ryan, et al, 2010) for chili using the same approach also confirms the environmental pressure due to trade liberalization through FTA.
Most of the previous research focused on the NAFTA. Grossman and Krueger (1991) attempted to find out the environmental effects for NAFTA and due to trade liberalization found out low emission of Sulfur Dioxide (SO2). Gale and Mendez (1998) re-examined one year of SO2 data drawn from the abovementioned Grossman and Krueger study. He showed that factor endowment play a vital part in defining the disparity in greenhouse gasses levels of various countries, and the effect of liberalization on pollution is not significant. Similarly, Logsdon and Husted (2000) showed that in Mexico the environmental impact of NAFTA is mixed, and either a positive or negative impact of this agreement could not be determined. A general equilibrium mode (GEM) was used by Reinert and Roland-Holst (2001) for three countries under NAFTA agreement. The results highlighted that most types of pollution increased in the three countries due to the NAFTA. Yu et al. (2011) emphasized on pollution in the United States and Mexico under the NAFTA. The study showed that the Greenhouse gas in U.S. and Mexico increased, but the quantity of this growth is high in Mexico. It was concluded that pollution haven hypothesis (PHH) may hold for Mexico. The commonality of the above studies is that they focused only on NAFTA, which is an FTA between developing and developed countries on the environment quality.


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