Article ID Journal Published Year Pages File Type
962809 Journal of International Economics 2008 17 Pages PDF
Abstract
The WTO and the EU have chosen two different 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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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