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Product standards, trade disputes and protectionism

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  • Sturm, Daniel

Abstract

Trade disputes over national product standards are a growing source of tension in the international trading system. The usual pattern is that a country introduces a new product standard for all sales of a good in its local market, which is justified as necessary for consumer or environmental protection. Importers into the local market, however, challenge the standard as a ''disguised barrier to trade'' or ''green protectionism''. The paper develops a two country political economy model to explain such disputes. It is shown how the political process can lead to a ''political failure'' which takes the form of either too many or too few product standards and disagreement between politicians in different countries over the optimal policy. In a second step the model is used to evaluate whether two common proposals to settle or avoid such disputes, mutual recognition of standards and harmonization, can improve the political process.

Suggested Citation

  • Sturm, Daniel, 2001. "Product standards, trade disputes and protectionism," LSE Research Online Documents on Economics 20134, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:20134
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    References listed on IDEAS

    as
    1. Burgess, Simon & Turon, Helene, 2000. "Unemployment dynamics, duration and equilibrium: evidence from Britain," LSE Research Online Documents on Economics 20162, London School of Economics and Political Science, LSE Library.
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    3. Timothy Besley & Anne Case, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 769-798.
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    More about this item

    Keywords

    Product standards; trade policy; environmental policy; political economy;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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