Does trade liberalization worsen the natural environment? How are environmental policies at home and abroad changing different countries' trade patterns? What role is there for trade policies in addressing environmental concerns such as global warming, ozone depletion, food safety and deforestation? Will regional economic integration reduce or exacerbate environmental problems in Europe or North America? What are the relative merits of compensation and sanctions as incentives for international co-operation on global environmental issues? These and related questions about the interrelationships between international trade and the environment are increasingly being asked by environmental policies. They are the subject of analysis in this book written by leading international economists from most continents. The chapters have been revised through a number of workshops at the GATT and form part of the background for the GATT's Secretariat's annual report International Trade 1990-91. The book begins with an analysis of the economics of environmental policies at both national and global levels, and examines the appropriateness of trade policy instruments for achieving environmental objectives. By drawing upon these insights it goes on to address a wide range of issues of concern to environmentalists. The final section draws upon modern political economy theory to evaluate the risk that protectionists will manipulate environmental concerns to reduce competition form imports, and to examine options for minimizing such outcomes.