Reciprocity and the Political Economy of Harmonization and Mutual Recognition of Regulatory Measures

41 Pages Posted: 12 Feb 2002

See all articles by Akiko Suwa-Eisenmann

Akiko Suwa-Eisenmann

L'Ecole Normale Superieure ; Paris School of Economics (PSE)

Thierry Verdier

Paris School of Economics (PSE); Delta - Ecole Normale Superieure (ENS); Centre for Economic Policy Research (CEPR)

Date Written: January 2002

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 also 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: Mutual recognition, standards, trade policy

JEL Classification: F13, L50

Suggested Citation

Suwa-Eisenmann, Akiko and Verdier, Thierry, Reciprocity and the Political Economy of Harmonization and Mutual Recognition of Regulatory Measures (January 2002). CEPR Discussion Paper No. 3147. Available at SSRN: https://ssrn.com/abstract=299418

Akiko Suwa-Eisenmann (Contact Author)

L'Ecole Normale Superieure ( email )

48 boulevard Jourdan
75014 Paris
France
+33 1 4313 6325 (Phone)
+33 1 4313 6362 (Fax)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Thierry Verdier

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014
France

Delta - Ecole Normale Superieure (ENS) ( email )

48, Boulevard Jourdan
75014 Paris
France
+33 1 4313 6308 (Phone)
+33 1 4313 6310 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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