IDEAS home Printed from https://ideas.repec.org/p/rye/wpaper/wp048.html
   My bibliography  Save this paper

Consumption Externalities, Product Quality, and the Role of National Treatment

Author

Listed:
  • Paul Missios

    (Department of Economics, Ryerson University, Toronto, Canada)

  • Ida Ferrara

    (DEpartment of Economics, York University, Toronto, Canada)

  • Halis Murat Yildiz

    (Department of Economics, Ryerson University, Toronto, Canada)

Abstract

In Article III of the WTO, National Treatment limits domestic policy in an e¤ort to curtail protectionist discrimination against foreign products. We examine National Treatment when goods are vertically di¤erentiated and generate consumption external- ities in two interdependent product markets, comparing quantity and price equilibria under Article III with those prevailing in a world in which Article III does not apply. While one may expect that high externalities would lead to a greater need for discrim- inatory policies, we show this is often not the case and, furthermore, that National Treatment can lead to a cleaner world environment.

Suggested Citation

  • Paul Missios & Ida Ferrara & Halis Murat Yildiz, 2015. "Consumption Externalities, Product Quality, and the Role of National Treatment," Working Papers 048, Ryerson University, Department of Economics.
    • Handle: RePEc:rye:wpaper:wp048
    as

    Download full text from publisher

    File URL: https://www.arts.ryerson.ca/economics/repec/pdfs/wp048.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Costinot, Arnaud, 2008. "A comparative institutional analysis of agreements on product standards," Journal of International Economics, Elsevier, vol. 75(1), pages 197-213, May.
    2. Kamal Saggi & Nese Sara, 2018. "National Treatment At The Wto: The Roles Of Product And Country Heterogeneity," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 3, pages 46-75, World Scientific Publishing Co. Pte. Ltd..
    3. Kyle Bagwell & Robert W. Staiger, 2001. "Domestic Policies, National Sovereignty, and International Economic Institutions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 519-562.
    4. Ferrara, Ida & Missios, Paul & Murat Yildiz, Halis, 2009. "Trading rules and the environment: Does equal treatment lead to a cleaner world?," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 206-225, September.
    5. Horn, Henrik & Mavroidis, Petros C., 2001. "Economic and legal aspects of the Most-Favored-Nation clause," European Journal of Political Economy, Elsevier, vol. 17(2), pages 233-279, June.
    6. Henrik Horn & Giovanni Maggi & Robert W. Staiger, 2010. "Trade Agreements as Endogenously Incomplete Contracts," American Economic Review, American Economic Association, vol. 100(1), pages 394-419, March.
    7. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    8. Fischer, Ronald & Serra, Pablo, 2000. "Standards and protection," Journal of International Economics, Elsevier, vol. 52(2), pages 377-400, December.
    9. Missios, Paul & Yildiz, Halis Murat, 2006. "The role of MFN under asymmetries in environmental standards," Economics Letters, Elsevier, vol. 93(2), pages 297-304, November.
    10. Sumeet Gulati & Devesh Roy, 2008. "National Treatment and the optimal regulation of environmental externalities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1445-1471, November.
    11. Horn, Henrik, 2011. "The burden of proof in trade disputes and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 15-29, July.
    12. Mattias Ganslandt & James R. Markusen, 2001. "Standards and Related Regulations in International Trade: A Modeling Approach," NBER Working Papers 8346, National Bureau of Economic Research, Inc.
    13. Brian R. Copeland, 1990. "Strategic Interaction among Nations: Negotiable and Non-negotiable Trade Barriers," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 84-108, February.
    14. Janeba, Eckhard, 1998. "Tax competition in imperfectly competitive markets," Journal of International Economics, Elsevier, vol. 44(1), pages 135-153, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferrara, Ida & Missios, Paul & Yildiz, Halis Murat, 2019. "Product quality, consumption externalities, and the role of National Treatment," European Economic Review, Elsevier, vol. 117(C), pages 1-35.
    2. Yang, Deli & Sonmez, Mahmut (Maho), 2018. "Global norm of national treatment for patent uncertainties: A longitudinal comparison between the US and China," Journal of World Business, Elsevier, vol. 53(2), pages 164-176.
    3. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.
    4. Robert W. Staiger & Alan O. Sykes, 2011. "International Trade, National Treatment, and Domestic Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 40(1), pages 149-203.
    5. Akihiko Yanase & Hiroshi Kurata, 2022. "Domestic product standards, harmonization, and free trade agreements," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(3), pages 855-885, August.
    6. Henrik Horn & Giovanni Maggi & Robert W. Staiger, 2010. "Trade Agreements as Endogenously Incomplete Contracts," American Economic Review, American Economic Association, vol. 100(1), pages 394-419, March.
    7. Olper, Alessandro, 2017. "The political economy of trade-related regulatory policy: environment and global value chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    8. Maggi, Giovanni, 2014. "International Trade Agreements," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 317-390, Elsevier.
    9. Robert W. Staiger & Alan O. Sykes, 2009. "International Trade and Domestic Regulation," NBER Working Papers 15541, National Bureau of Economic Research, Inc.
    10. Beverelli, Cosimo & Boffa, Mauro & Keck, Alexander, 2014. "Trade policy substitution: Theory and evidence from Specific Trade Concerns," WTO Staff Working Papers ERSD-2014-18, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Horn, Henrik, 2011. "The burden of proof in trade disputes and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 15-29, July.
    12. Inaba, Masaru & Nutahara, Kengo, 2009. "The role of investment wedges in the Carlstrom-Fuerst economy and business cycle accounting," Economics Letters, Elsevier, vol. 105(3), pages 200-203, December.
    13. Kuenzel, David J., 2020. "WTO tariff commitments and temporary protection: Complements or substitutes?," European Economic Review, Elsevier, vol. 121(C).
    14. Sumeet Gulati & Devesh Roy, 2008. "National Treatment and the optimal regulation of environmental externalities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1445-1471, November.
    15. Horn, Henrik, 2009. "The Burden of Proof in National Treatment Disputes and the Environment," Working Paper Series 791, Research Institute of Industrial Economics.
    16. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    17. Staiger, Robert & Bagwell, Kyle & Bown, Chad, 2015. "Is the WTO Passé?," CEPR Discussion Papers 10672, C.E.P.R. Discussion Papers.
    18. JINJI Naoto, 2009. "An Economic Theory of the SPS Agreement," Discussion papers 09033, Research Institute of Economy, Trade and Industry (RIETI).
    19. Schmidt, Julia & Steingress, Walter, 2022. "No double standards: Quantifying the impact of standard harmonization on trade," Journal of International Economics, Elsevier, vol. 137(C).
    20. Yasushi Kawabata & Yasuhiro Takarada, 2021. "Deep trade agreements and harmonization of standards," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 118-143, July.

    More about this item

    Keywords

    National Treatment; non-discrimination; environmental damages; consumption externalities; environmental policy; domestic policy; WTO.;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rye:wpaper:wp048. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Doosoo Kim (email available below). General contact details of provider: https://edirc.repec.org/data/deryeca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.