Market access and minimum quality standards

Roberto Hernan Gonzalez
Authors registered in the RePEc Author Service: Praveen Kujal

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: In this paper we analyze market access blocking properties of a Minimum Quality Standard (MQS). For an importing country that imports a high and low quality good, the welfare maximizing optimal MQS limits market access only to the high quality firm. This result is further confirmed for a uniform MQS imposed by a high quality producing country that imports a low quality good. The optimal MQS in this case always blocks entry to the low quality foreign firm. We then propose a Flexible Quality Standard (FQS). Under a FQS a good is taxed if it does not meet the standard. Otherwise, imports are exempt from the tariff. Both firms stay in the market under a FQS and discriminatory import tariff. Total welfare in this case is greater than under free trade and under the optimal MQS (for a pure importing country). With uniform conditional tariffs also both firms stay in the market, however, the welfare obtained is greater than under free trade and lower than under a MQS.

Date: 2004-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://e-archivo.uc3m.es/rest/api/core/bitstreams ... b51cd6645bd9/content (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we042608

Access Statistics for this paper

More papers in UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía
Bibliographic data for series maintained by Ana Poveda ().