Trade-Inducing Quality Standards for Used Durables
AbstractWe construct a theoretical framework to study the impact of asymmetric quality standards on used durable goods on trade flows, profits and consumer welfare. We show that asymmetry in quality standards generates trade in used goods from high to low standard countries while at the same time reducing trade in new goods. The industry in the exporting country benefits from this change while consumers lose out. Consumers in the importing country are the biggest beneficiaries, but domestic industry is hurt. These results suggest that quality standards on used goods are a powerful policy tool whose use should be monitored by the WTO.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4838.
Date of creation: Jan 2005
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Other versions of this item:
- Sofronis Clerides & Costas Hadjiyiannis, 2004. "Trade-Inducing Quality Standards for Used Durables," University of Cyprus Working Papers in Economics 5-2004, University of Cyprus Department of Economics.
- F10 - International Economics - - Trade - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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