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Reducing regulatory trade costs: why and how?
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1028-3625
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EUI; RSC; Working Paper; 2023/10; Global Governance Programme-495; [Global Economics]
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PELKMANS, Jacques, Reducing regulatory trade costs: why and how?, EUI, RSC, Working Paper, 2023/10, Global Governance Programme-495, [Global Economics] - https://hdl.handle.net/1814/75496
Abstract
Regulatory trade costs matter. They consist of the costs incurred by A exporters of effective market
access to B due to different regulation and enforcement, in particular of ‘risk regulation’ (health,
safety, environment). Stronger, negotiations for ‘deeper’ bilateral and regional trade agreements
as well as estimates of tariff equivalents of ‘regulatory trade costs’ have increased the awareness
that lowering of regulatory trade costs is quintessential for world trade. For middle-income and
developing countries, these costs are rising secularly. This paper critically reviews the three principal
ways of reducing such costs to the world economy – trade agreements, international regulatory
cooperation, and global technical standardisation – and discusses how to render these more
effective. Key challenges are to reduce national standards setting and to promote more effectively
world standards. The European Union plays a frontrunner role in this regard, including for information
and communications technology standards.