Regionalism in Standards: Good or Bad for Trade?
Regional agreements on standards have been largely ignored by economists and unconditionally blessed by multilateral trade rules. The authors find, theoretically and empirically, that such agreements increase trade between participating countries b...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5457728/regionalism-standards-good-or-bad-trade http://hdl.handle.net/10986/13999 |
| Summary: | Regional agreements on standards have
been largely ignored by economists and unconditionally
blessed by multilateral trade rules. The authors find,
theoretically and empirically, that such agreements increase
trade between participating countries but not necessarily
with the rest of the world. Adopting a common standard in a
region-that is, harmonization-boosts exports of excluded
industrial countries to the region. But it reduces exports
of excluded developing countries, possibly because
developing country firms are hurt more by an increase in the
stringency of standards and benefit less from economies of
scale in integrated markets. Mutual recognition agreements
are more uniformly trade promoting unless they contain
restrictive rules of origin, in which case intra-regional
trade increases at the expense of trade with other,
especially developing, countries. The authors propose a
modification of international trade rules to strike a better
balance between the interests of integrating and excluded countries. |
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