DP8767 North-South Standards Harmonization and International Trade
|Author(s):||Olivier Cadot, Anne-Célia Disdier, Lionel Fontagné|
|Publication Date:||January 2012|
|Keyword(s):||harmonization, Regional trade agreement, South-South trade, technical regulations|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8767|
Recent years have seen a surge in regional trade agreements (RTAs) and the development of non-tariff measures (NTMs). As a consequence, a growing number of RTAs include provisions on NTMs. This paper investigates the effect of standards-harmonization clauses contained in many North-South Agreements on international trade. Using a gravity equation, we find that (i) North-South harmonization of technical regulations reinforces a hub-and-spoke trade structure potentially detrimental to the development of South-South trade and (ii) harmonization on regional standards hurts Southern exports to the North. Thus, standards-harmonization provisions included in many recent North-South RTAs miss their target and contribute to marginalize Southern countries in the world economy.