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Mutual Recognition and the Strategic Use of International Standards

Author

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  • Wallner, Klaus

    (SITE - Stockholm Institute of Transition Economics and East European Economies)

Abstract

This paper considers domestic product standards that do not raise the willingness to pay by consumers but increase the costs for foreign suppliers of serving the market. It is shown in a Cournot triopoly model that such standards can be used as strategic tool to raise domestic welfare by creating asymmetry between local and foreign producers. A country can raise its welfare by concluding mutual recognition agreements with a strict subset of its trading partners. In that case exclusively the largest countries agree on mutual recognition of their home standards, to the detriment of the country with the smaller home market.

Suggested Citation

  • Wallner, Klaus, 1998. "Mutual Recognition and the Strategic Use of International Standards," SSE/EFI Working Paper Series in Economics and Finance 254, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0254
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    References listed on IDEAS

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    1. Fare, R. & Grosskopf, S. & Roos, P., 1995. "Productivity and quality changes in Swedish pharmacies," International Journal of Production Economics, Elsevier, vol. 39(1-2), pages 137-144, April.
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    Cited by:

    1. A. Mantovani & M. Vancauteren, 2003. "The Harmonization of Technical Barriers to Trade, Innovation and Export Behavior: Theory with an application to EU Environmental Data," Working Papers 480, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. T. Huw Edwards, 2004. "Trade and Strategic Regulatory Bias in Monopolistic Industries," Discussion Paper Series 2004-21, Department of Economics, Loughborough University, revised Sep 2004.

    More about this item

    Keywords

    Product standards; non-tariff barriers; mutual recognition;

    JEL classification:

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

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