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Are Standards Always Protectionist?

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Author Info

  • Marette, Stephan
  • Beghin, John C.

Abstract

We analyze the effects of a domestic standard that reduces an externality associated with the consumption of the good targeted by the standard, using a model in which foreign and domestic producers compete in the domestic good market. Producers can reduce expected damage associated with the externality by incurring a cost that varies by source of origin. Despite potential protectionism, the standard is useful in correcting the consumption externality in the domestic country. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. The standard is actually anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper provides important implications for the estimation and use of tariff equivalents of nontariff barriers. JEL Classification Code: F13

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12826.

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Date of creation: 01 Jan 2010
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Publication status: Published in Review of International Economics 2010, vol. 18 no. 1, pp. 179-192
Handle: RePEc:isu:genres:12826

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Related research

Keywords: externality; nontariff barriers; protectionism; safety; standard; tariff equivalent;

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Cited by:
  1. Bo Xiong & John C. Beghin, 2013. "Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations," Food and Agricultural Policy Research Institute (FAPRI) Publications 13-wp544, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  2. Li, Yuan & Beghin, John C., 2012. "Protectionism Indices for Non-Tariff Measures: An Application to Maximum Residue Levels," Staff General Research Papers 34985, Iowa State University, Department of Economics.
  3. van Tongeren, Frank & Beghin, John C. & Marette, Stephan, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," Staff General Research Papers 13146, Iowa State University, Department of Economics.
  4. Xiong, Bo & Beghin, John C., 2012. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," Staff General Research Papers 35584, Iowa State University, Department of Economics.
  5. Beghin, John C., 2013. "Non-Tariff Measures with Market Imperfections: Trade and Welfare Implications," Staff General Research Papers 35923, Iowa State University, Department of Economics.
  6. Michael Bratt, 2014. "Estimating the bilateral impact of non-tariff measures (NTMs)," Research Papers by the Department of Economics, University of Geneva 14011, Département des Sciences Économiques, Université de Genève.
  7. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL 116898, International Agricultural Trade Research Consortium.
  8. Gaigné, Carl & Larue, Bruno, 2013. "Quality Standards, International Trade and the Evolution of Industries," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150469, Agricultural and Applied Economics Association.
  9. Beghin, John C. & Disdier, Anne-Celia & Marette, Stephan, 2013. "The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market," Working Papers 142502, International Agricultural Trade Research Consortium.
  10. Bergès, Fabian & Monier-Dilhan, Sylvette, 2010. "Trade Policy Reform: How to win wide-ranging support?," IDEI Working Papers 651, Institut d'Économie Industrielle (IDEI), Toulouse.
  11. Beghin, John C. & Li, Yuan, 2013. "The Political Economy Of Food Standard Determination: International Evidence From Maximum Residue Limits," Staff General Research Papers 36181, Iowa State University, Department of Economics.
  12. Katia Berti & Rod Falvey, . "Does Trade Weaken product Quality Standards?," Discussion Papers 11/24, University of Nottingham, GEP.

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