) and the South (China) in the presence of a global pollution externality. Each country's share of global pollution depends … pressure on the US to raise environmental regulations on industry. Capital will move to China. Because the increased pollution …Bilateral trade and capital flows have increased substantially between the United States and China yielding economic …

, ‘pollution havens’ emerge in countries where environmental regulation is ‘over-lax.’ We examine the impact of pollution abatement … equilibrium model of trade and pollution nesting the pollution haven motive for trade with the factor endowment motive. We analyze …