Working Paper: CEPR ID: DP2574
Authors: Richard Baldwin
Abstract: ?Regulatory protection? or technical barriers to trade (TBT) are two names for the myriad of cost-raising, behind-the-border measures that substantially inhibit trade. This paper argues that TBTs are important and their liberalization will continue. This liberalization will involve ?hegemonic harmonization? or mutual recognition of rules and test. Such liberalization will almost surely entail preferential arrangements among rich nations, creating in essence, a two-tier system of market access with developing nations in the second tier. Importantly, this discrimination will be higher for advanced products (which are naturally subject to more regulations and standards), so the discrimination may have an 'escalating' feature, much as tariffs did in the early post-war period. Consequently, the WTO should address the potentially discriminatory aspects of regional TBT liberalization initiatives. In particular, rules of origin should not be allowed.
Keywords: standards; technical barriers to trade; WTO reform
JEL Codes: F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| TBTs (F38) | trade flows (F10) |
| liberalization of TBTs (F13) | hegemonic harmonization or mutual recognition of standards (F55) |
| hegemonic harmonization or mutual recognition of standards (F55) | two-tier market access system (D40) |
| liberalization of TBTs (F13) | discriminatory outcomes (J71) |
| discriminatory outcomes (J71) | advanced products face higher levels of discrimination (J78) |
| liberalization of TBTs (F13) | disadvantage for developing nations (F63) |
| rules of origin (F55) | exclusion of third nations from market access (F13) |