Are Standards Always Protectionist?
AbstractWe 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 InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12826.
Date of creation: 01 Jan 2010
Date of revision:
Publication status: Published in Review of International Economics 2010, vol. 18 no. 1, pp. 179-192
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Web page: http://www.econ.iastate.edu
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externality; nontariff barriers; protectionism; safety; standard; tariff equivalent;
Other versions of this item:
- StÃ©phan Marette & John C. Beghin, 2007. "Are Standards Always Protectionist?," Center for Agricultural and Rural Development (CARD) Publications 07-wp450, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- StÃ©phan Marette & John C. Beghin, 2007. "Are Standards Always Protectionist?," Food and Agricultural Policy Research Institute (FAPRI) Publications 07-wp450, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-06-23 (Agricultural Economics)
- NEP-ALL-2007-06-23 (All new papers)
- NEP-COM-2007-06-23 (Industrial Competition)
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