Eco-Labels and International Trade in Textiles

Wesley Nimon, John C. Beghin
June 1999  [99-WP 221]

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Suggested citation:

Nimon, W. and J.C. Beghin. 1999. "Eco-Labels and International Trade in Textiles." Working paper 99-WP 221. Center for Agricultural and Rural Development, Iowa State University.


The authors provide a formal analysis of the welfare and trade implications of eco-labeling schemes. They present a simple model of vertical (quality) differentiation that captures stylized features of the textiles market in which trading takes place between an industrialized North (domestic) and a developing South (foreign). The paper investigates several labeling scenarios--labeling by North, labeling by 130th North and South, and harmonization of 170th labels--and draws conclusions about their impact on consumers.