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Mutual Recognition and the Strategic Use of International Standards

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  • Wallner, Klaus

    (SITE - Stockholm Institute of Transition Economics and East European Economies)

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    Abstract

    This paper considers domestic product standards that do not raise the willingness to pay by consumers but increase the costs for foreign suppliers of serving the market. It is shown in a Cournot triopoly model that such standards can be used as strategic tool to raise domestic welfare by creating asymmetry between local and foreign producers. A country can raise its welfare by concluding mutual recognition agreements with a strict subset of its trading partners. In that case exclusively the largest countries agree on mutual recognition of their home standards, to the detriment of the country with the smaller home market.

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    Bibliographic Info

    Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 254.

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    Length: 23 pages
    Date of creation: 19 Aug 1998
    Date of revision:
    Handle: RePEc:hhs:hastef:0254

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    Keywords: Product standards; non-tariff barriers; mutual recognition;

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    Cited by:
    1. 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.
    2. T. Huw Edwards, 2004. "Trade and Strategic Regulatory Bias in Monopolistic Industries," Discussion Paper Series, Department of Economics, Loughborough University 2004-21, Department of Economics, Loughborough University, revised Sep 2004.

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