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Are Standards Always Protectionist?

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  • Stéphan Marette
  • John C. Beghin

Abstract

We analyze the effects of a domestic standard that reduces an externality associated with the consumption of the good targeted by the standard, using a model in which foreign and domestic producers compete in the domestic good market. Producers can reduce expected damage associated with the externality by incurring a cost that varies by source of origin. Despite potential protectionism, the standard is useful in correcting the consumption externality in the domestic country. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. The standard is actually anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper provides important implications for the estimation and use of tariff equivalents of nontariff barriers.

Suggested Citation

  • Stéphan Marette & John C. Beghin, 2007. "Are Standards Always Protectionist?," Food and Agricultural Policy Research Institute (FAPRI) Publications 07-wp450, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  • Handle: RePEc:ias:fpaper:07-wp450
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 6, pages 105-108 World Scientific Publishing Co. Pte. Ltd..
    2. Meloni, Giulia & Swinnen, Johan, 2017. "Standards, Tariffs And Trade: The Rise And Fall Of The Raisin Trade Between Greece And France In The Late 19th Century And The Definition Of Wine," Working Papers 253853, American Association of Wine Economists.
    3. Johan F.M. Swinnen & Thijs Vandemoortele, 2009. "Trade, Development, and the Political Economy of Public Standards," LICOS Discussion Papers 23609, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. repec:bla:jcmkts:v:55:y:2017:i:2:p:387-405 is not listed on IDEAS
    5. Fabian Bergès & Sylvette Monier-Dilhan, 2013. "Trade Policy Reform : How to Win Wide-ranging Support ?," Recherches économiques de Louvain, De Boeck Université, vol. 79(2), pages 27-43.
    6. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    7. Yuan Li & Bo Xiong & John C Beghin, 2017. "The Political Economy of Food Standard Determination: International Evidence from Maximum Residue Limits," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 14, pages 239-267 World Scientific Publishing Co. Pte. Ltd..
    8. Yuan Li & John C. Beghin, 2017. "Protectionism indices for non-tariff measures: An application to maximum residue levels," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 10, pages 167-178 World Scientific Publishing Co. Pte. Ltd..
    9. Birg, Laura & Voßwinkel, Jan S., 2015. "Minimum quality standards and exports," Center for European, Governance and Economic Development Research Discussion Papers 248, University of Goettingen, Department of Economics.
    10. Michael Bratt, 2014. "Estimating the bilateral impact of non-tariff measures (NTMs)," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 14011, Institut d'Economie et Econométrie, Université de Genève.
    11. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Protecting Health or Protecting Imports? Evidence from EU Non-Tariff Barriers," Discussion Papers 241267, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    12. repec:bla:reviec:v:25:y:2017:i:5:p:1105-1129 is not listed on IDEAS
    13. Robert Grundke & Christoph Moser, 2014. "Hidden Protectionism? Evidence from Non-tariff Barriers to Trade in the United States," CESifo Working Paper Series 5142, CESifo Group Munich.
    14. Gaigné, Carl & Larue, Bruno, 2013. "Quality Standards, International Trade and the Evolution of Industries," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150469, Agricultural and Applied Economics Association.
    15. Marette Stéphan, 2016. "Non-Tariff Measures When Alternative Regulatory Tools Can Be Chosen," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 1-17, May.
    16. repec:eee:reveco:v:53:y:2018:i:c:p:185-202 is not listed on IDEAS
    17. Lili Yan ING & Olivier CADOT, 2017. "Remaking Ad valorem equivalents of non-tariff measures in ASEAN," Working Papers DP-2017-09, Economic Research Institute for ASEAN and East Asia (ERIA).
    18. Bo Xiong & John C. Beghin, 2017. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 12, pages 193-207 World Scientific Publishing Co. Pte. Ltd..
    19. Frank van Tongeren & John Beghin & Stéphane 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.
    20. repec:wsi:wschap:9789813144415_0013 is not listed on IDEAS
    21. Beghin, John C., 2012. "Non Tariff Measures with Market Imperfections: Trade and Welfare Implications," 2012: New Rules of Trade?, December 2012, San Diego, California 142787, International Agricultural Trade Research Consortium.
    22. John C. Beghin & Anne-Celia Disdier & Stéphan Marette, 2017. "The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 13, pages 209-237 World Scientific Publishing Co. Pte. Ltd..
    23. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL 116898, International Agricultural Trade Research Consortium.
    24. Katia Berti & Rod Falvey, "undated". "Does Trade Weaken product Quality Standards?," Discussion Papers 11/24, University of Nottingham, GEP.
    25. Xiong, Bo, 2012. "Three essays on non-tariff measures and the gravity equation approach to trade," ISU General Staff Papers 201201010800003536, Iowa State University, Department of Economics.

    More about this item

    Keywords

    externality; nontariff barriers; protectionism; safety; standard; tariff equivalent.;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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