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Product Standards, Trade Disputes and Protectionism

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  • Daniel M. Sturm

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.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0486.

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Date of creation: Jan 2001
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Handle: RePEc:cep:cepdps:dp0486

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: Product standards; trade policy; environmental policy; political economy;

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References

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  1. Besley, Timothy & Case, Anne, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 769-98, August.
  2. Simon Burgess & H Turon, 2000. "Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain," CEP Discussion Papers dp0474, Centre for Economic Performance, LSE.
  3. Stephen Nickell & Tracy Jones & Glenda Quintini, 2000. "A picture of job insecurity facing British men," LSE Research Online Documents on Economics 20141, London School of Economics and Political Science, LSE Library.
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Citations

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Cited by:
  1. Costinot, Arnaud, 2008. "A Comparative Institutional Analysis of Agreements on Product Standards," University of California at San Diego, Economics Working Paper Series qt09f6660d, Department of Economics, UC San Diego.
  2. Vigani, Mauro & Olper, Alessandro, 2013. "GMO standards, endogenous policy and the market for information," Food Policy, Elsevier, vol. 43(C), pages 32-43.
  3. Johan F.M. Swinnen & Thijs Vandemoortele, 2009. "Trade, Development, and the Political Economy of Public Standards," LICOS Discussion Papers 23609, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  4. Pierpaolo Battigalli & Giovanni Maggi, 2003. "International agreements on product standards: an incomplete-contracting theory," Working Papers 229, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  5. 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.
  6. Kawahara, Shinya, 2011. "Electoral competition with environmental policy as a second best transfer," Resource and Energy Economics, Elsevier, vol. 33(3), pages 477-495, September.
  7. Mina Baliamoune & Stefan Lutz, 2009. "Preemption, Predation, and Minimum Quality Standards," ICER Working Papers 20-2009, ICER - International Centre for Economic Research.
  8. Jackson, Lee Ann & Jansen, Marion, 2010. "Risk assessment in the international food safety policy arena. Can the multilateral institutions encourage unbiased outcomes?," Food Policy, Elsevier, vol. 35(6), pages 538-547, December.
  9. Joanna Poyago-Theotoky & Huw Edwards, 2012. "Regulatory protection when firms decide first on technical collaboration and R&D," Working Papers 2012.05, School of Economics, La Trobe University.
  10. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
  11. T.Huw Edwards, 2009. "Regulatory Protection When Firms Move First," Discussion Paper Series 2009_19, Department of Economics, Loughborough University, revised Nov 2009.

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