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Regionalism in Standards: Good or Bad for Trade?

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Author Info

  • Maggie X. Chen

    ()
    (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Aaditya Mattoo

    ()
    (World Bank)

Abstract

Regional agreements on standards have been largely ignored by economists and blessed by multilateral trade rules. Using a constructed panel data that identifies the different types of agreements at the industry level, we find that such agreements increase the trade between participating countries but not necessarily with the rest of the world. Harmonization of standards may reduce the exports of excluded countries, especially in markets that have raised the stringency of standards. Mutual Recognition Agreements are more uniformly trade promoting unless they contain restrictive rules of origin, in which case intraregional trade increases at the expense of imports from other countries.

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File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Chen_IIEPWP2009-14.pdf
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Bibliographic Info

Paper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2009-14.

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Length: 41 pages
Date of creation: Aug 2008
Date of revision:
Publication status: Published in Canadian Journal of Economics 41(3), August 2008, pp. 838-863
Handle: RePEc:gwi:wpaper:2009-14

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Web page: http://www.gwu.edu/~iiep/
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Keywords: regionalism; standard; harmonization; MRA; rules of origin;

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References

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  1. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
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  4. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  5. Soloaga, Isidro & Winters, L. Alan, 1999. "Regionalism in the Nineties: What Effect on Trade?," CEPR Discussion Papers 2183, C.E.P.R. Discussion Papers.
  6. Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
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  8. Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank.
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Citations

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Cited by:
  1. Natalie Chen & Dennis Novy, 2012. "On the Measurement of Trade Costs: Direct vs. Indirect Approaches to Quantifying Standards and Technical Regulations," CEP Discussion Papers dp1164, Centre for Economic Performance, LSE.
  2. Reyes, Jose-Daniel, 2011. "International harmonization of product standards and firm heterogeneity in international trade," Policy Research Working Paper Series 5677, The World Bank.
  3. Benjamin Shepherd & Patrick Messerlin, 2008. "Development Perspectives on Trade Growth at the Extensive Margin," Sciences Po publications info:hdl:2441/5341, Sciences Po.
  4. Richard Chisik, 2010. "Trade Disputes, Quality Choice, and Economic Integration," Working Papers 022, Ryerson University, Department of Economics.
  5. Shepherd, Ben & Wilson, Norbert L.W., 2013. "Product standards and developing country agricultural exports: The case of the European Union," Food Policy, Elsevier, vol. 42(C), pages 1-10.
  6. Richard Chisik, 2010. "Limited Incremental Linking and Unlinked Trade Agreements," Working Papers 023, Ryerson University, Department of Economics.
  7. Olivier CADOT & Anne-Cécilia DISDIER & Lionel FONTAGNÉ, 2012. "North-South Standards Harmonization and International Trade," Working Papers P42, FERDI.
  8. Toulemonde, Eric, 2013. "A welfare analysis of the principle of mutual recognition," European Economic Review, Elsevier, vol. 60(C), pages 1-16.
  9. Bernard Hoekman, 2013. "Sustaining Multilateral Trade Cooperation in a Multipolar World Economy," RSCAS Working Papers 2013/86, European University Institute.
  10. Aldaz-Carroll, Enrique, 2006. "Regional approaches to better standards systems," Policy Research Working Paper Series 3948, The World Bank.
  11. Arvind Subramanian & Martin Kessler, 2013. "The Hyperglobalization of Trade and Its Future," Working Paper Series WP13-7, Peterson Institute for International Economics.
  12. Witold Czubala & Ben Shepherd & John S. Wilson, 2009. "Help or Hindrance? The Impact of Harmonised Standards on African Exports †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(5), pages 711-744, November.
  13. Vitor Trindade & Johannes Moenius, 2007. "Networks, Standards and Intellectual Property Rights," Working Papers 0705, Department of Economics, University of Missouri.
  14. J. Luis Guasch & Jean-Louis Racine & Isabel Sánchez & Makhtar Diop, 2007. "Quality Systems and Standards for a Competitive Edge," World Bank Publications, The World Bank, number 6768, January.
  15. Gabriel Felbermayr & Mario Larch, 2014. "Transatlantic Free Trade: Questions and Answers from the Vantage Point of Trade Theory," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 14(4), pages 03-17, 01.
  16. 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.

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