Certification of Origin as a Non-Tariff Barrier
This paper puts forward the opinion that the certification of origin constitutes another type of non-tariff barrier. Indeed, certification of origin often combines both a quantity restriction and a sort of quality cost subsidy. We consider the canonical model of strategic trade policy, whereby two firms located respectively in the home country and in a foreign country are competing on the domestic market. In this framework, we show how certification can allow the domestic firm to position itself as a high quality producer. If, however, the certified firm offers the low quality good, then consumers' surplus may be improved. Copyright Blackwell Publishing Ltd 2005..
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Volume (Year): 13 (2005)
Issue (Month): 3 (08)
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