A Comparative Institutional Analysis of Agreements on Product Standards

Arnaud Costinot

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: The WTO and EU have chosen two differernt agreements on product standards. While the WTO's approach is primarily based on a "National Treatment" (NT) principle, the EU's approach crucially relies on a principle of "Mutual Recognition" (MR). This paper offers a first look at the comparative performance of these two principles. We show that standards are imposed for levels of externalities that are too low under NT and too high under MR. This suggests that NT should be preferred to MR when the amount of trade in goods characterized by high levels of externalities is large.

Keywords: product standards; trade agreements; incomplete contracts; national treatment; mutual recognition (search for similar items in EconPapers)
Date: 2008-03-01
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Citations: View citations in EconPapers (41)

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Journal Article: A comparative institutional analysis of agreements on product standards (2008)
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