Do Regional Trading Arrangements Harm the Environment?. An Analysis of 162 Countries in 1990

n this paper, we investigate the impact of regional trading arrangements (RTAs) on the environment. We propose an empirical model where RTAs, trade, growth and environmental quality are interrelated. As a result, an RTA in our model can impact the environment either directly or indirectly via trade and income. We find that membership in an RTA reduces the amount of environmental damage by increasing the volume of trade and raising per capita income. We do not, however, find that RTAs directly impact the environment. Taken together, our results suggest that the recent surge of regional trading arrangements will not increase the amount of pollution, but in fact may help the environment.