Product standards, trade disputes and protectionism
Trade disputes over national product standards are a growing source of tension in the international trading system. The usual pattern is that a country introduces a new product standard for all sales of a good in its local market, which is justified as necessary for consumer or environmental protection. Importers into the local market, however, challenge the standard as a ''disguised barrier to trade'' or ''green protectionism''. The paper develops a two country political economy model to explain such disputes. It is shown how the political process can lead to a ''political failure'' which takes the form of either too many or too few product standards and disagreement between politicians in different countries over the optimal policy. In a second step the model is used to evaluate whether two common proposals to settle or avoid such disputes, mutual recognition of standards and harmonization, can improve the political process.
| Item Type | Working paper |
|---|---|
| Keywords | Product standards; trade policy; environmental policy; political economy |
| Departments |
Centre for Economic Performance Economics |
| Date Deposited | 29 Jul 2008 16:30 |
| URI | https://researchonline.lse.ac.uk/id/eprint/20134 |