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Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System

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  • Baldwin, Richard

Abstract

‘Regulatory protection’ or technical barriers to trade (TBT) are two names for the myriad of cost-raising, behind-the-border measures that substantially inhibit trade. This paper argues that TBTs are important and their liberalization will continue. This liberalization will involve ‘hegemonic harmonization’ or mutual recognition of rules and test. Such liberalization will almost surely entail preferential arrangements among rich nations, creating in essence, a two-tier system of market access with developing nations in the second tier. Importantly, this discrimination will be higher for advanced products (which are naturally subject to more regulations and standards), so the discrimination may have an 'escalating' feature, much as tariffs did in the early post-war period. Consequently, the WTO should address the potentially discriminatory aspects of regional TBT liberalization initiatives. In particular, rules of origin should not be allowed.

Suggested Citation

  • Baldwin, Richard, 2000. "Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System," CEPR Discussion Papers 2574, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2574
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    References listed on IDEAS

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    8. Kyle Bagwell & Robert W. Staiger, 1998. "The Simple Economics of Labor Standards and the GATT," NBER Working Papers 6604, National Bureau of Economic Research, Inc.
    9. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
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    More about this item

    Keywords

    Standards; Technical Barriers To Trade; WTO Reform;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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