Open-access resources and international trade

by Francis, Michael Peter

This thesis was concerned with one panicular, but important. aspect of the '-trade and the environment " debate: the inter-relationship beoveen international trade, trade policy. and renewable open-access resources such as fisheries. In order to develop rnodels for analysis. a standard (Gordon-Schaefer) mode1 of renewable resources is integrated into the general equilibrium Ricardian and Hecksclier-Ohlin international trade modeis. While such stylized models have limitations, they capture the propeny that the overesploitation of renewable resources lowers productivity of the resource-hanestinindustry relative to other industries reducing output despite increased effort -4 key finding of this thesis is that. although free trade and capital mobility is not optimal when resources are open access. this need not imply that restricted trade and capital mobility is better. at times. subsidized trade rnay be best. Three main cases are considered in the thesis First. second-best vade policy for a sniall open econorny is considerrd II is drrnonstratrd that welfare can be impro\.ed by a tariff in the case of a fish esponing country and a trade subsidy in the case of a tish irnponing country Second. capital mobility is allowed for and it is shown that a small open econorny can unambiguously gain from permining free capital mobility if it is capital scarce and fishing is labour intensive. The welfare effects of an unfettered capital outflow hou-ever. are ambiguous. Lastly. endogenous world prices are considered within the contest of a hVO-coUntr)' spccification. It is shown that when trade occurs between consenationist and open-access econornies there is always a trade policy that can improve welfare. ACIChJOW LEDGkîENT First and foremost 1 am especially grateful to mu thesis supervisor. Professor La- Schembri. not only for his valuable advice and guidance throughout the writing of this thesis, but also for his encouragement and dedication as a supenisor Thanks also goes to the thesis cornmittee members for their valuable comments and suggestions. In addition, 1 would like to especially thank other members of the econornics depanment Professors Steve Ferris and Xick Rowe who took time to carefully read drafts and provide useful and stimulatin- cornments and suggestions. The assistance of depanment staff. and thar of Ginette Hane in panicular. is also -ratef'ully acknowled~ed 1 ~~ould also like tn thank Professors Brian Erard. Fen Hampson. Aileen Thompson. and Stan Lher for their suppon and the esperience 1 receked as rheir research assistants Apan frorn academic suppon. the suppon of frirnds and farnily has been invaluable There are man'. people ro irhom 1 am indebted. but I would like to take this opponuniry to thank a feu in panicular to Beatricr. David and Anronio for countless letters. ro And' who has been so "accommodating". to Judy and Greg for the beer and burgers. to Steve and Ina for everything from a roof at times to chocolate mousse, to Neville and rny Grandfather for thrir constant care anu xppon. to Mum and Dad whose love estended thousands of miles made me feel that I had never really left home. and to Varuna for hcr love. suppon. stress management. and patience as 1 devoted time to writing and awy from all else. ro -ou al1 1 say thank you. pur suppon has made writing this acknodedgment possible. i\