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Are Standards Always Protectionist?

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  • Stéphan Marette
  • John Beghin

Abstract

We analyze the effect of heterogeneity of foreign and domestic producers on product standard and investigate whether the standard chosen by the welfare-maximizing policymaker is protectionist. In a partial-equilibrium set-up, both domestic and foreign producers compete in selling a product in the domestic market, in the presence of consumption externalities. The policymaker chooses a minimum domestic standard that has to be met by both domestic and foreign producers. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. We show that the standard is anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper identifies multiple caveats for the estimation of tariff equivalents of nontariff barriers. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 1 (02)
Pages: 179-192

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Handle: RePEc:bla:reviec:v:18:y:2010:i:1:p:179-192

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Cited by:
  1. Li, Yuan & Beghin, John C., 2012. "Protectionism Indices for Non-Tariff Measures: An Application to Maximum Residue Levels," Staff General Research Papers 34985, Iowa State University, Department of Economics.
  2. Bo Xiong & John C. Beghin, 2013. "Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations," Food and Agricultural Policy Research Institute (FAPRI) Publications 13-wp544, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  3. Michael Bratt, 2014. "Estimating the bilateral impact of non-tariff measures (NTMs)," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 14011, Institut d'Economie et Econométrie, Université de Genève.
  4. Xiong, Bo & Beghin, John C., 2012. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," Working Papers 142384, International Agricultural Trade Research Consortium.
  5. van Tongeren, Frank & Beghin, John C. & Marette, Stephan, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," Staff General Research Papers 13146, Iowa State University, Department of Economics.
  6. Beghin, John C., 2013. "Non-Tariff Measures with Market Imperfections: Trade and Welfare Implications," Staff General Research Papers 35923, Iowa State University, Department of Economics.
  7. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL 116898, International Agricultural Trade Research Consortium.
  8. Beghin, John C. & Disdier, Anne-Celia & Marette, Stephan, 2013. "The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market," Working Papers 142502, International Agricultural Trade Research Consortium.
  9. Beghin, John C. & Li, Yuan, 2013. "The Political Economy Of Food Standard Determination: International Evidence From Maximum Residue Limits," Staff General Research Papers 36181, Iowa State University, Department of Economics.
  10. Katia Berti & Rod Falvey, . "Does Trade Weaken product Quality Standards?," Discussion Papers 11/24, University of Nottingham, GEP.
  11. Gaigné, Carl & Larue, Bruno, 2013. "Quality Standards, International Trade and the Evolution of Industries," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150469, Agricultural and Applied Economics Association.
  12. Bergès, Fabian & Monier-Dilhan, Sylvette, 2010. "Trade Policy Reform: How to win wide-ranging support?," TSE Working Papers 10-205, Toulouse School of Economics (TSE).

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