Certification of Origin as a Non-Tariff Barrier
This paper put forward the opinion that the certification of origin constitutes another type ofnon-tariff barrier. Indeed, certification of origin often combines both a quantity restriction anda sort of quality cost subsidy. We consider the canonical model of strategic trade policy,whereby two firms are located respectively in the home country and in a foreign country andare competing on the domestic market. In this framework, we show how certification canallow the domestic firm to position itself as a high quality producer. If, however, the certifiedfirm offers the low quality good, then consumers' surplus may be improved.
|Date of creation:||2004|
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