OPEN ACCESS RENEWABLE RESOURCES - TRADE AND TRADE-POLICY IN A 2-COUNTRY MODEL

This paper develops a two-good, two-country model with national open a ccess renewable resources. We derive an appropriate analog of ''factor proportions'' for the renewable resource case and link it to trade pa tterns and to the likelihood of diversified production. The resource i mporter gains from trade. However, a diversified resource exporting co untry necessarily suffers a decline in steady state utility resulting from trade, and may lose along the entire transition path. Thus the ba sic ''gains from trade'' presumption is substantially undermined by op en access resources. Tariffs imposed by the resource importing country always benefit the resource exporter, and may be pareto-improving. (C ) 1998 Elsevier Science B.V.