Reciprocity, Harmonisation and Mutual and Mutual Recognition of Regulatory Measures: A Political Economy Perspective

Akiko Suwa-Eisenmann and Thierry Verdier

Research Unit Working Papers from Laboratoire d'Economie Appliquee, INRA

Abstract: This paper discusses the issue of regulatory protectionism and its implication for reciprocity and international bargaining on regulation. In a simple two way trade model a la Brander and Spencer, we take into account the three following features of regulatory measures: a) a regulation raises the cost not only of foreign producers but also of domestic producers, b) a regulation creates a fixed cost which is entirely supported by foreign exporters, c) a regulation may provide a welfare gain valued per se by individuals or to correct some market failure. In this context, we investigate the political economy forces for unilateral regulatory protectionism and the effectiveness of various intra-sectorial bargaining schemes (negotiated reciprocal regulation setting, harmonization or mutual recognition agreements) to ensure reciprocal market access.

Keywords: standards; negotiation; market access (search for similar items in EconPapers)
JEL-codes: D72 F13 (search for similar items in EconPapers)
Pages: 33 pages
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