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Reciprocity and the Political Economy of Harmonization and Mutual Recognition of Regulatory Measures

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  • Suwa Eisenmann, Akiko
  • Verdier, Thierry

Abstract

This 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 Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3147.

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Date of creation: Jan 2002
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Handle: RePEc:cpr:ceprdp:3147

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Keywords: mutual recognition; standards; trade policy;

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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. Katia Berti & Rod Falvey, . "Does Trade Weaken product Quality Standards?," Discussion Papers 11/24, University of Nottingham, GEP.
  3. Swinnen, Johan F.M. & Vandemoortele, Thijs, 2008. "The Political Economy of Nutrition and Health Standards in Food Markets," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44364, European Association of Agricultural Economists.
  4. 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.
  5. A. Mantovani & M. Vancauteren, 2003. "The Harmonization of Technical Barriers to Trade, Innovation and Export Behavior: Theory with an application to EU Environmental Data," Working Papers 480, Dipartimento Scienze Economiche, Universita' di Bologna.
  6. Toulemonde, Eric, 2013. "A welfare analysis of the principle of mutual recognition," European Economic Review, Elsevier, vol. 60(C), pages 1-16.

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