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Mutual Recognition Agreements and Trade Diversion: Consequences for Developing Nations

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Abstract

This paper presents a baseline model that illustrates the implications of Mutual Recognition Agreements (MRAs) for excluded nations. The model shows that MRAs can harm third country exports because of a trade-diversion effect. We use highly disaggregated trade data from developed and developing nations to test whether or not MRAs have a negative effect on exports from excluded nations. In particular, we focus on the impact of a North-North MRA on the South. We find empirical evidence in support of the model; the MRA between the EU and the USA has harmed exports from Canada and the group of developing countries included in the study.

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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.
    • Handle: RePEc:gii:giihei:heiwp20-2006
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    Cited by:

    1. Anne-Célia Disdier & Lionel Fontagné & Olivier Cadot, 2015. "North-South Standards Harmonization and International Trade," The World Bank Economic Review, World Bank, vol. 29(2), pages 327-352.
    2. Shearer, Matthew & Salles Almeida, Juliana & Gutiérrez Jr., Carlos H., 2009. "The Treatment of Agriculture in Regional Trade Agreements in the Americas," IDB Publications (Working Papers) 2795, Inter-American Development Bank.
    3. Matthew Shearer & Juliana Salles Almeida & Carlos H. Gutiérrez Jr., 2009. "The Treatment of Agriculture in Regional Trade Agreements in the Americas," IDB Publications (Working Papers) 23538, Inter-American Development Bank.
    4. Galina An & Keith E. Maskus, 2009. "The Impacts of Alignment with Global Product Standards on Exports of Firms in Developing Countries," The World Economy, Wiley Blackwell, vol. 32(4), pages 552-574, April.
    5. Shearer, Matthew & Salles Almeida, Juliana & Gutiérrez Jr., Carlos H., 2009. "The Treatment of Agriculture in Regional Trade Agreements in the Americas," IDB Publications (Working Papers) 2715, Inter-American Development Bank.
    6. Matthew Shearer & Juliana Salles Almeida & Carlos H. Gutiérrez Jr., 2009. "The Treatment of Agriculture in Regional Trade Agreements in the Americas," IDB Publications (Working Papers) 26158, Inter-American Development Bank.
    7. Olivier Cadot & Alan Asprilla & Julien Gourdon & Ralph Peters & Christian Knebel, 2015. "Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis," UNCTAD Blue Series Papers 69, United Nations Conference on Trade and Development.

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    More about this item

    Keywords

    International Economics; economic integration; Trade Policy; economic development; mutual recognition agreements; MRA; standards; trade diversion; zeros; cournot; quality; inspection; Canada; Mexico; USA; EU; European Union; FTA; TBT; regionalism;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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