Trade-Related International Regulatory Co-operation: A Theoretical Framework

Martin von Lampe, Koen Deconinck and Véronique Bastien
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Martin von Lampe: OECD
Koen Deconinck: OECD
Véronique Bastien: OECD

No 195, OECD Trade Policy Papers from OECD Publishing

Abstract: This report provides a conceptual foundation for the analysis of international regulatory co-operation (IRC) and its potential benefits through reduced trade costs. Different forms of IRC aiming to reduce specification, conformity assessment and information costs - which can arise from regulatory heterogeneity, costly conformity assessment procedures and insufficient regulatory transparency – are addressed. The report argues that trade costs need to be balanced against the regulatory objectives of mitigating various market imperfections. Integrating these two elements often allows significant gains in terms of national welfare, gains that can be augmented by negotiated outcomes among trading partners. IRC may also have important effects on trade with third countries. Related welfare implications are, however, ambiguous and depend on the specifics of the IRC outcome as well as on third countries’ own regulations.

Keywords: conformity assessment costs; game theory; information costs; Nash equilibrium; regulation; specification costs; trade costs (search for similar items in EconPapers)
JEL-codes: C71 C72 C73 D60 D61 F13 K23 L51 (search for similar items in EconPapers)
Date: 2016-12-20
New Economics Papers: this item is included in nep-int and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:195-en

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