Reciprocity and the Political Economy of Harmonization and Mutual Recognition of Regulatory Measures
AbstractThis Paper discusses the issue of regulatory protectionism and its implication for reciprocity and international bargaining on regulation. In a simple two way trade model a la Brander and Spencer, we take into account the three following features of regulatory measures: a) a regulation raises the cost not only of foreign producers but also of domestic producers; b) a regulation also creates a fixed cost which is entirely supported by foreign exporters; c) a regulation may provide a welfare gain valued per se by individuals or to correct some market failure. In this context, we investigate the political economy forces for unilateral regulatory protectionism and the effectiveness of various intra-sectorial bargaining schemes (negotiated reciprocal regulation setting, harmonization or mutual recognition agreements) to ensure reciprocal market access.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3147.
Date of creation: Jan 2002
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- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
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- NEP-ALL-2003-03-14 (All new papers)
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- Alberto AMURGO PACHECO, 2006. "Mutual Recognition Agreements and Trade Diversion: Consequences for Developing Nations," IHEID Working Papers 20-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2007.
- Johan F. M. Swinnen & Thijs Vandemoortele, 2011. "Trade and the Political Economy of Food Standards," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(2), pages 259-280, 06.
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