Chapter 18: ECOLABELS AND INTERNATIONAL TRADE IN THE TEXTILE AND APPAREL MARKET

We provide a formal analysis of the welfare and trade implications of ecolabeling schemes. We couch our analysis in the context of a stylized model of the textiles market between an industrialized North and a developing South. Textiles ecolabeling involves production-process standards, raising concerns of protectionism against the South. We investigate several labeling scenarios (labeling by North, labeling by both North and South, and harmonization).