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Discriminatory consequences of non-discriminatory standards

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  • Mattoo, Aaditya

Abstract

This paper shows that environmental, labour and other standards can be effective strategic policy instruments even when they are strictly non-discriminatory. This is because standards can be set which the low cost producer optimally chooses not to meet, allowing the high cost producer to monopolize the standardized segment of the market. Thus, it is important for policy to consider how much scope there should be for the imposition of unilaterally determined standards - which could impact negatively on trading partners even when they are non-discriminatory - rather than internationally negotiated standards.

Suggested Citation

  • Mattoo, Aaditya, 1996. "Discriminatory consequences of non-discriminatory standards," WTO Staff Working Papers TISD-96-01, World Trade Organization (WTO), Economic Research and Statistics Division.
  • Handle: RePEc:zbw:wtowps:tisd9601
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    References listed on IDEAS

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    1. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    2. Seade, J, 1985. "Profitable Cost Increases and the Shifting of Taxation : Equilibrium Response of Markets in Oligopoly," The Warwick Economics Research Paper Series (TWERPS) 260, University of Warwick, Department of Economics.
    3. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
    4. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 383-406.
    5. Ulph, A. & Ulph, D., 1994. "Trade, strategic innovation and strategic environmental policy: a general analysis," Discussion Paper Series In Economics And Econometrics 9416, Economics Division, School of Social Sciences, University of Southampton.
    6. Ulph, Alistair Mitchell & Ulph, David, 1994. "Trade, Strategic Innovation and Strategic Environmental Policy - a General Analysis," CEPR Discussion Papers 1063, C.E.P.R. Discussion Papers.
    7. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 3-13.
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    Citations

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    Cited by:

    1. Bonroy, Olivier, 2003. "Minimum Quality Standard and Protectionism," Cahiers de recherche 0302, GREEN.
    2. Holmes, Peter, 2004. "The WTO and Domestic Regulation," Centre on Regulation and Competition (CRC) Working papers 30630, University of Manchester, Institute for Development Policy and Management (IDPM).
    3. Cadot, Olivier & Suwa-Eisenmann, Akiko & Traça, Daniel, 2003. "OGM et relations commerciales transatlantiques," Cahiers d'Economie et de Sociologie Rurales (CESR), INRA (French National Institute for Agricultural Research), vol. 68.
    4. World Bank Group, 2016. "Global Economic Prospects, January 2016," World Bank Publications, The World Bank, number 23435, June.

    More about this item

    Keywords

    Standards; Oligopoly; Strategic trade policy; Environment;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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