The claim that lower environmental standards in foreign countries reduce industrial competitiveness for high standard countries is on firm theoretical ground because

Question

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Higher environmental standards increase the cost of production, which affects the competitiveness of firms, especially in industries with thin profit margins or high competition. The cost of complying with these higher standards could make the products too expensive to make a profit, making them less competitive in the global market. As a result, firms may choose to relocate to countries with lower environmental standards where they can produce goods more cheaply. Thus, lower environmental standards in foreign countries reduce industrial competitiveness for high standard countries.

The Claim That Lower Environmental Standards in Foreign Countries Reduce