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Free Trade and Evolving Standards

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  • Casella, Alessandra

Abstract

Because standards and regulations respond to a society's demand for specific public goods, we expect them to be shaped by preferences, endowments, technologies - the fundamental determinants of this demand. There is no a priori reason why standards should be equal in different societies. This paper studies the interaction between standards and international trade. It shows that although standards can be used to manipulate trade flows, there is no logical connection between standards harmonization and gains from trade. Moreover, standards themselves will be modified by the opening of trade and under reasonable assumptions harmonization will be one of the outcomes of free trade. The empirical evidence suggests that industry groups are assuming an increasing role in shaping government regulations. In this perspective, standards need not be automatically identified with national policies, and the possibility of international alliances of industry groups must be considered. The result of market integration is then international harmonization together with increased differentiation across industries.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1204.

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Date of creation: Jul 1995
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Handle: RePEc:cpr:ceprdp:1204

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Related research

Keywords: Coalition Formation; Free Trade; Harmonization; Standards;

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Cited by:
  1. Clougherty, Joseph A & Grajek, Michal, 2006. "The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6026, C.E.P.R. Discussion Papers.
  2. Majore, Giandomenico, 2004. "The Internationalization of Regulation: Implications for Developing Countries," Centre on Regulation and Competition (CRC) Working papers, University of Manchester, Institute for Development Policy and Management (IDPM) 30685, University of Manchester, Institute for Development Policy and Management (IDPM).
  3. Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank.
  4. Alessandra Casella, 1996. "Product Standards Coalitions in a Market Without Borders," NBER Working Papers 5853, National Bureau of Economic Research, Inc.
  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. Michal Grajek, 2004. "Diffusion of ISO 9000 Standards and International Trade," CIG Working Papers, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) SP II 2004-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  7. Kym Anderson, 1996. "Social Policy Dimensions of Economic Integration: Environmental and Labour Standards," NBER Working Papers 5702, National Bureau of Economic Research, Inc.
  8. Schmidt, Oliver, 2007. "The becoming of a market - A reflection illustrated by two case studies from Uganda," MPRA Paper 5559, University Library of Munich, Germany, revised Oct 2007.
  9. Eric Neumayer & Indra de Soysa, 2004. "Globalization and the Right to Free Association and Collective," Labor and Demography, EconWPA 0410006, EconWPA, revised 22 Apr 2005.
  10. Nirvikar Singh, 2004. "The Impact of International Labor Standards: A Survey of Economic Theory," International Trade, EconWPA 0412007, EconWPA.
  11. Alexander Haupt, 2000. "Environmental Product Standards, International Trade and Monopolistic Competition," International Tax and Public Finance, Springer, Springer, vol. 7(4), pages 585-608, August.
  12. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
  13. Dermot Leahy & Catia Montagna, 2005. "Union legislation and export platform FDI," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(4), pages 437-452.
  14. Parrinello, Sergio, 2000. "The "institutional factor" in the theory of international trade: new vs. old trade theories," MPRA Paper 31472, University Library of Munich, Germany.
  15. Jackson, Lee Ann, 2000. "An Economic Model Of Agricultural Labeling Policy Harmonization In International Trading Systems," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C., Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Perfor 26012, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  16. Dermot Leahy & Catia Montagna, 2005. "Union Bargaining Power, Social Dumping, and Foreign Direct Investment," International Trade, EconWPA 0510001, EconWPA.
  17. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.

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