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Tariffs, product standards, and national treatment at the WTO

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  • Difei Geng

Abstract

This paper develops an oligopolistic model with consumption externalities to study (i) the policy interaction between tariffs and product standards; (ii) how such interaction may affect the welfare justification of national treatment (NT) in product standards. Absent NT, tariff reductions can lead to more discriminatory standards against foreign firms. Imposing NT eliminates discrimination but can induce higher tariffs which tend to undermine efficiency. As a result, the welfare justification of NT is stronger when tariffs are constrained. These findings suggest that the World Trade Organization's success in tariff liberalization can strengthen the case for its NT‐based approach to product standards.

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  • Difei Geng, 2024. "Tariffs, product standards, and national treatment at the WTO," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1105-1133, July.
    • Handle: RePEc:bla:ecinqu:v:62:y:2024:i:3:p:1105-1133
    DOI: 10.1111/ecin.13227
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