Regionalism in Standards: Good or Bad for Trade?

By M. Chen, Aaditya Mattoo. 2004

224 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Political Science and International Relations, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/66f57d4665d3200d5ae49963dbd058af15f65ab7

How researchers see this paper

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In Economics and Econometrics

1. Arvind Subramanian
2. G. Swann
3. M. Kessler
4. Dani Rodrik
5. Andrew K. Rose

In Political Science and International Relations

1. Arvind Subramanian
2. G. Swann

In Strategy and Management

1. Arvind Subramanian
2. G. Swann
3. M. Kessler
4. Dani Rodrik
5. Engelbert Stockhammer
6. Andrew K. Rose

Citations in the corpus

• The Economics of Standardization: An Update (2010, result): “…2009, however, a large number of similar studies have been carried out, including: Baller (2007), Blind and Jungmittag (2001, 2005), Blind (2001), Chen and Mattoo (2004), Chen et al (2006), Clougherty & Grajek (2008), Czubala et al (2007), Disdier et al (2007), Fontagné et al (2005), Grajek…”
• The Hyperglobalization of Trade and Its Future (2013, background): “…agreements could create signifi cant discrimination against outsiders, because most favored nation (MFN) levels of protection are signifi cant and there is considerable scope for the preferential recognition of standards, licensing, and qualifi cation requirements (Chen and Mattoo 2004).”
• Help or hindrance ? the impact of harmonized standards on african exports (2007, unknown): “Our results therefore complement existing analyses on mandatory standards (Baller, 2007; Chen and Mattoo, 2008) and firm-level survey data (Chen et al., 2006).”
• Is the WTO Passé (2015, unknown): “…developed and developing countries that focus on harmonizing standards tend to reduce the exports of the developing country members to third countries, and Chen and Mattoo (2008), who nd that regional agreements to harmonize standards can reduce developing country exports from outside the region.”