Product Standards, Trade Disputes and Protectionism
AbstractTrade 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.
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Date of creation: Jan 2001
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Product standards; trade policy; environmental policy; political economy;
Other versions of this item:
- Daniel Sturm, 2006. "Product standards, trade disputes, and protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 39(2), pages 564-581, May.
- F18 - International Economics - - Trade - - - Trade and Environment
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
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