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A Comparative Institutional Analysis of Agreements on Product Standards

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  • Costinot, Arnaud

Abstract

The WTO and EU have chosen two differernt agreements on product standards. While the WTO's approach is primarily based on a "National Treatment" (NT) principle, the EU's approach crucially relies on a principle of "Mutual Recognition" (MR). This paper offers a first look at the comparative performance of these two principles. We show that standards are imposed for levels of externalities that are too low under NT and too high under MR. This suggests that NT should be preferred to MR when the amount of trade in goods characterized by high levels of externalities is large.

Suggested Citation

  • Costinot, Arnaud, 2008. "A Comparative Institutional Analysis of Agreements on Product Standards," University of California at San Diego, Economics Working Paper Series qt09f6660d, Department of Economics, UC San Diego.
  • Handle: RePEc:cdl:ucsdec:qt09f6660d
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    Cited by:

    1. Leonardo Baccini & Giammario Impullitti & Edmund J. Malesky, 2017. "Globalization and State Capitalism: Assessing Vietnam's Accession to the WTO," CESifo Working Paper Series 6618, CESifo Group Munich.
    2. 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.
    3. T.Huw Edwards, 2009. "Regulatory Protection When Firms Move First," Discussion Paper Series 2009_19, Department of Economics, Loughborough University, revised Nov 2009.
    4. Vitor Trindade & Johannes Moenius, 2007. "Networks, Standards and Intellectual Property Rights," Working Papers 0705, Department of Economics, University of Missouri.
    5. 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.
    6. T. Huw Edwards, 2012. "Mutual Recognition versus National Treatment of Standards in a Classical Monopoly or Oligopoly," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(3), pages 455-487, September.
    7. Maggi, Giovanni, 2014. "International Trade Agreements," Handbook of International Economics, Elsevier.
    8. 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.
    9. Toulemonde, Eric, 2013. "A welfare analysis of the principle of mutual recognition," European Economic Review, Elsevier, vol. 60(C), pages 1-16.
    10. Akihiko Yanase & Hiroshi Kurata, 2014. "Domestic Product Standards and Free Trade Areas: Implications for the EU-Japan FTA," ERSA conference papers ersa14p1041, European Regional Science Association.
    11. 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.
    12. Katia Berti & Rod Falvey, "undated". "Does Trade Weaken product Quality Standards?," Discussion Papers 11/24, University of Nottingham, GEP.
    13. Baquero, Maria & Kuroda, Toshifumi, 2015. "Analysis of the role of international network effects on the diffusion of second and third generation mobile communication networks," 26th European Regional ITS Conference, Madrid 2015 127126, International Telecommunications Society (ITS).
    14. Robert W. Staiger & Alan O. Sykes, 2009. "International Trade and Domestic Regulation," NBER Working Papers 15541, National Bureau of Economic Research, Inc.

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