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Number:
TISD-96-001
Author
Aaditya Mattoo
World Trade Organization
Publishing date: August 1996
Abstract
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This paper shows that environmental, labour and other standards can be
effective strategic policy instruments even when they are strictly
non-discriminatory. This is because standards can be set which the low
cost producer optimally chooses not to meet, allowing the high cost
producer to monopolize the standardized segment of the market. Thus, it is
important for policy to consider how much scope there should be for the
imposition of unilaterally determined standards —
which
could impact
negatively on trading partners even when they are non-discriminatory —
rather than internationally negotiated standards.
Keywords
Standards; Oligopoly; Strategic trade policy; Environment
JEL codes
[F12, L13]
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paper in MS Word format (567 KB, 37 pages)
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