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Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System

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  • Baldwin, Richard

Abstract

‘Regulatory protection’ or technical barriers to trade (TBT) are two names for the myriad of cost-raising, behind-the-border measures that substantially inhibit trade. This paper argues that TBTs are important and their liberalization will continue. This liberalization will involve ‘hegemonic harmonization’ or mutual recognition of rules and test. Such liberalization will almost surely entail preferential arrangements among rich nations, creating in essence, a two-tier system of market access with developing nations in the second tier. Importantly, this discrimination will be higher for advanced products (which are naturally subject to more regulations and standards), so the discrimination may have an 'escalating' feature, much as tariffs did in the early post-war period. Consequently, the WTO should address the potentially discriminatory aspects of regional TBT liberalization initiatives. In particular, rules of origin should not be allowed.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2574.

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Date of creation: Oct 2000
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Handle: RePEc:cpr:ceprdp:2574

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Related research

Keywords: Standards; Technical Barriers To Trade; WTO Reform;

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  1. Markusen, James R. & Venables, Anthony J., 1988. "Trade policy with increasing returns and imperfect competition : Contradictory results from competing assumptions," Journal of International Economics, Elsevier, vol. 24(3-4), pages 299-316, May.
  2. James Brander & Paul Krugman, 1982. "A 'Reciprocal Dumping' Model of International Trade," Working Papers 513, Queen's University, Department of Economics.
  3. Sapir, André, 1997. "Domino Effects in Western European Trade, 1960-92," CEPR Discussion Papers 1576, C.E.P.R. Discussion Papers.
  4. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
  5. Dixit, Avinash & Grossman, Gene M. & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Scholarly Articles 3450061, Harvard University Department of Economics.
  6. Richard E. Baldwin & Philippe Martin, 1999. "Two Waves of Globalisation: Superficial Similarities, Fundamental Differences," NBER Working Papers 6904, National Bureau of Economic Research, Inc.
  7. Keith Head & Thierry Mayer, 2004. "Non-Europe : the magnitude and causes of market fragmentation in the EU," Cahiers de la Maison des Sciences Economiques bla99004a, Université Panthéon-Sorbonne (Paris 1).
  8. Matutes, Carmen & Regibeau, Pierre, 1996. "A selective review of the economics of standardization. Entry deterrence, technological progress and international competition," European Journal of Political Economy, Elsevier, vol. 12(2), pages 183-209, September.
  9. Bagwell,K. & Staiger,R.W., 1998. "The simple economics of labor standards and the Gatt," Working papers 9, Wisconsin Madison - Social Systems.
  10. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
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