Hagemejer, Jan and Michalek, Jan (2006): Standardization union effects: the case of EU enlargement.
Download (713Kb) | Preview
The analysis of trade policy shows growing interest in various types of “standards”. While technical regulations and standards are introduced to protect the interest of consumers, they can also act as technical barriers to trade (TBT), as foreign suppliers complying with national regulations might be required to bear certain costs of adjustment to the new regime. Recent literature focused on the concept of standards and concluded that shared standards promote trade. We instead set our attention to technical regulations of the European Union and concentrate on their effects on trade costs. The analysis is inspired by Gandal and Shy’s (2001) cost reducing standardization union theory. This paper summarizes results of research undertaken within a larger product assessing importance of technical barriers to trade for new EU members. The recent empirical study by Hagemejer (2005), based on detailed trade data of the EU. He has shown that in sectors where the EU technical regulations are most complicated and require costly adaptation, the trade within EU is booming. He argues that the trade between EU members is more concentrated within the high-TBT products, while the imports from outside are focused on the low-TBT or no-TBT products. Thus, EU technical regulations might in fact be trade diverting if the difference in productivity between intra and extra-EU partners is large. In this context we analyze the pattern of new members’ exports to the “old” EU. We calculate the trade coverage of various standardisation approaches and analyze the comparative advantage structure of the new EU members. We demonstrate that the structure of TBT’s affecting exports from new EU members is slowly converging with the one that characterizes intra-EU trade. Therefore, we expect that CEEC’s countries will benefit from applying common technical regulations of the EU after accession. In the last section of our paper we report the results of questionnaire-based research made among Polish companies in December of 2004, i.e. after the Eastern enlargement. It seems that the adjustment costs were moderate and the adaptation process to new technical regulations is already completed. Therefore, one can expected welfare gains for new members of the EU. We perform a CGE simulation using a GTAP model to assess these gains.
|Item Type:||MPRA Paper|
|Original Title:||Standardization union effects: the case of EU enlargement|
|Keywords:||EU enlargement; technical barriers to trade; international trade|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models
F - International Economics > F1 - Trade > F10 - General
|Depositing User:||Jan Hagemejer|
|Date Deposited:||31. May 2010 22:44|
|Last Modified:||14. Feb 2013 00:16|
Armington P. (1969) A theory of demand for products distinguished by place of production, IMF Staff papers XVI, p. 156-176.
Brenton, P., Sheehy, J. and Vancauteren, M., (2001) Technical Barriers to Trade in the European Union: Importance for Accession Countries, Journal of Common Market Studies 39, 2: 265-284.
European Commission (1998): The Single Market Review, Dismantling of Barriers. Technical Barriers to Trade. Sub-series III: Volume 1, Office for Official Publications of the European Communities. Luxembourg.
FEMISE, FEM 22-03 (2005), Comparative analysis of importance of technical barriers o trade for CEECs and MPC exports to the EU. The report was prepared by J. Michalek, J. Hagemejer and J. Rothert from Warsaw University and by Alfred Tovias and Victoia Roshal from Hebrew University. Additional contributions were made by Mark Vancauteren and Agnieszka Pugacewicz.
Gandal, N., Shy, O., 2001, Standardization policy and international trade, Journal of International Economics, vol. 53, p. 363-383.
Gorzelak M., Żołkiewski Z. (2002) The perception of technical barriers to trade of manufacturing enterprises in Poland, w: Brenton, P., Manzocchi, S. (eds.) (2002), Enlargement, Trade and Investment. The Impact of Barriers to Trade in Europe, Edward Elgar, Cheltenham.
Hagemejer J. (2005), Significance of the EU standardization policy for intra and extra-EU trade, Unpublished Manuscript
Hagemejer J., Michałek J. (2004) The Significance of Technical Barriers to Trade for Poland and other CEEC’s Acceding to the EU: Reconsidering the Evidence in: EMERGO: Journal of transforming economies and societies, pp. 36-52, vol. XI, no. 1(39).
Hertel T., Tsigas M., (1997) Structure of GTAP, GTAP Resource #413, https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=413
Hertel T., McDougall R., Itakura K. (2001) GTAP Model Version 6.0, GTAP Resource #576, https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=576
Hoffmann A.N., (2000) The Gains from Partial Completion of the Single Market, Weltwirtschaftliches Archiv, 2000 no.4
Maliszewska M. (2002), Eastern EU Expansion: Implications Of The Enlarged Single Market For Current And New Member States, Paper presented at ETSG Annual Conference
Marczewski K. (2003), Kierunki zmian w handlu zagranicznym Polski po przystąpieniu do Unii Europejskiej, (Possible changes in the Polish trade after accession to the EU) Ekonomista no. 2/2003, pp. 191-216.
Michalek J., Sledziewska, K. (2004), Inter-industry trade between Central-East European countries and the EU. Do changes in the trade pattern reflect H-O approach?, paper presented at the Annual ETSG conference in Madrid (September 2004).
Moenius, J. (1999), "Information versus Product Adaptation: The role of Standards in Trade", working paper no. 11/2499, University of California, San Diego.