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Free Trade and Evolving Standards

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  • Casella, Alessandra

Abstract

Because standards and regulations respond to a society's demand for specific public goods, we expect them to be shaped by preferences, endowments, technologies - the fundamental determinants of this demand. There is no a priori reason why standards should be equal in different societies. This paper studies the interaction between standards and international trade. It shows that although standards can be used to manipulate trade flows, there is no logical connection between standards harmonization and gains from trade. Moreover, standards themselves will be modified by the opening of trade and under reasonable assumptions harmonization will be one of the outcomes of free trade. The empirical evidence suggests that industry groups are assuming an increasing role in shaping government regulations. In this perspective, standards need not be automatically identified with national policies, and the possibility of international alliances of industry groups must be considered. The result of market integration is then international harmonization together with increased differentiation across industries.

Suggested Citation

  • Casella, Alessandra, 1995. "Free Trade and Evolving Standards," CEPR Discussion Papers 1204, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1204
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    Citations

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    Cited by:

    1. Dermot Leahy & Catia Montagna, 2005. "Union Bargaining Power, Social Dumping, and Foreign Direct Investment," International Trade 0510001, EconWPA.
    2. Alessandra Casella, 1996. "Product Standards Coalitions in a Market Without Borders," NBER Working Papers 5853, National Bureau of Economic Research, Inc.
    3. Joseph A Clougherty & Michał Grajek, 2008. "The impact of ISO 9000 diffusion on trade and FDI: A new institutional analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 613-633, June.
    4. Schmidt, Oliver, 2007. "The becoming of a market - A reflection illustrated by two case studies from Uganda," MPRA Paper 5559, University Library of Munich, Germany, revised Oct 2007.
    5. Kym Anderson, 1997. "Social Policy Dimensions of Economic Integration: Environmental and Labor Standards," NBER Chapters,in: Regionalism versus Multilateral Trade Arrangements, NBER-EASE Volume 6, pages 57-90 National Bureau of Economic Research, Inc.
    6. Dermot Leahy & Catia Montagna, 2005. "Union legislation and export platform FDI," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(4), pages 437-452.
    7. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
    8. Jackson, Lee Ann, 2000. "An Economic Model Of Agricultural Labeling Policy Harmonization In International Trading Systems," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26012, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    9. Sergio Parrinello, 2002. "The 'institutional factor' in the theory of international trade: new vs. old trade theories," Chapters,in: Is There Progress in Economics?, chapter 15 Edward Elgar Publishing.
    10. Frank van Tongeren & John Beghin & St├ęphane Marette, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," OECD Food, Agriculture and Fisheries Papers 21, OECD Publishing.
    11. Eric Neumayer & Indra de Soysa, 2004. "Globalization and the Right to Free Association and Collective," Labor and Demography 0410006, EconWPA, revised 22 Apr 2005.
    12. Maskus, Keith E. & Wilson, John S. & Tsunehiro Otsuki, 2000. "Quantifying the impact of technical barriers to trade : a framework for analysis," Policy Research Working Paper Series 2512, The World Bank.
    13. Michal Grajek, 2004. "Diffusion of ISO 9000 Standards and International Trade," CIG Working Papers SP II 2004-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    14. Alexander Haupt, 2000. "Environmental Product Standards, International Trade and Monopolistic Competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 585-608, August.
    15. Majore, Giandomenico, 2004. "The Internationalization of Regulation: Implications for Developing Countries," Centre on Regulation and Competition (CRC) Working papers 30685, University of Manchester, Institute for Development Policy and Management (IDPM).
    16. Nirvikar Singh, 2004. "The Impact of International Labor Standards: A Survey of Economic Theory," International Trade 0412007, EconWPA.
    17. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.

    More about this item

    Keywords

    Coalition Formation; Free Trade; Harmonization; Standards;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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