Mutual Recognition Agreements and Trade Diversion: Consequences for Developing Nations
AbstractThis 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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Bibliographic InfoPaper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 20-2006.
Date of creation: 26 Oct 2006
Date of revision: Jun 2007
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;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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