Product Standards for Internationally Integrated Goods Markets

By Alan O. Sykes | Go to book overview

Chapter 2
Nature and Scope of the Problem

THE PURPOSE of this chapter is threefold: (1) to illustrate the myriad of ways that standards, regulations, and conformity assessment procedures impose barriers to the free flow of goods in international markets; (2) to provide some further classification of technical barriers that will prove useful to later discussion; and (3) to offer a general assessment of the importance of the problem to trading nations. The latter task has proven especially difficult.

Efforts to assess the scope of the problem are hampered considerably by a lack of hard information about the consequences of technical barriers, a difficulty that does not arise to the same degree in studies of more conventional trade barriers. The effects of tariffs, for example, can usually be estimated from the tariff rate itself, coupled with plausible assumptions about pertinent supply and demand elasticities. Estimates of the impact of quantitative restrictions such as quotas are likewise straightforward. The empirical economic literature is thus replete with estimates of the welfare losses from conventional protectionist measures and the benefits of liberalizing them. By contrast, the effects of technical barriers are typically hard to measure. They are often hidden in the firm-specific costs of modifying a product to meet a standard or regulation, in the costs of testing and certification procedures and their attendant delays, or in the ways that noncompliance with a standard may affect consumer purchasing decisions. Broad systematic studies of technical barriers are generally lacking, and the available information tends to be limited to particular markets and industries in which disputes have arisen or in which case studies have been undertaken. Even then, much of what we know is impressionistic and anecdotal.

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