Working Paper: CEPR ID: DP8767
Authors: Anneclia Disdier; Lionel Fontagné; Olivier Cadot
Abstract: Recent years have seen a surge in regional trade agreements (RTAs) and the development of non-tariff measures (NTMs). As a consequence, a growing number of RTAs include provisions on NTMs. This paper investigates the effect of standards-harmonization clauses contained in many North-South Agreements on international trade. Using a gravity equation, we find that (i) North-South harmonization of technical regulations reinforces a hub-and-spoke trade structure potentially detrimental to the development of South-South trade and (ii) harmonization on regional standards hurts Southern exports to the North. Thus, standards-harmonization provisions included in many recent North-South RTAs miss their target and contribute to marginalize Southern countries in the world economy.
Keywords: harmonization; regional trade agreement; South-South trade; technical regulations
JEL Codes: F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| North-South harmonization of technical regulations (L59) | hub-and-spoke trade structure (F10) |
| North-South harmonization of technical regulations (L59) | South-South trade (F19) |
| harmonization of regional standards (L15) | southern exports to the North (F10) |
| harmonization of regional standards (L15) | trade diversion effect (F14) |