Regionalism in standards: good or bad for trade?

Authors


  • Chen is also affiliated with the Elliott School of International Affairs at George Washington University. We are very grateful to Scott Baier, Paul Brenton, Carsten Fink, Kishore Gawande, Bernard Hoekman, Jim Markusen, Keith Maskus, Mike Moore, Kamal Saggi, and two anonymous referees for many valuable suggestions. The views expressed here are those of the authors and should not be attributed to the World Bank. Email: xchen@gwu.edu; amattoo@worldbank.org

Abstract

Abstract.  Regional agreements on standards have been largely ignored by economists and blessed by multilateral trade rules. Using a constructed panel data that identifies the different types of agreements at the industry level, we find that such agreements increase the trade between participating countries but not necessarily with the rest of the world. Harmonization of standards may reduce the exports of excluded countries, especially in markets that have raised the stringency of standards. 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 imports from other countries.

Abstract

Les accords régionaux sur les normes ont été grandement ignorés par les économistes mais consacrés dans les règles multilatérales de commerce. Utilisant des données de panels qui identifient les différents types d'accord au niveau de l'industrie, on découvre que ces accords augmentent le commerce entre les pays participants, mais pas nécessairement avec le reste du monde. L'harmonisation des normes peut réduire les exportations des pays exclus, en particulier dans les marchés qui ont relevé leurs normes. Les accords de reconnaissance mutuelle promeuvent plus uniformément l'augmentation du commerce à moins qu'ils ne contiennent des restrictions quant aux pays d'origine. Dans ce dernier cas, les accroissements dans le commerce intra-régional se font aux dépens des importations en provenance des autres pays.

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