Paper prepared for the World Bank Workshop on "Quantifying the Trade Effect of Standards and Technical Barriers: Is it Possible?" April 27, 2000. ∗ Department of Economics, University of Colorado at Boulder, Campus Box 256, Boulder Colorado 80309-0256, and The World Bank, email: Keith.Maskus@colorado.edu. ** Development Research Group (DECRG), The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, email: firstname.lastname@example.org.
The impact of standards and technical regulations on trade is at the forefront of policy discussions.1 This is particularly true in relation to challenges confronting developing nations as they seek to increase production for global export markets. In regard to voluntary standards, such as those in the International Organization for Standardization (ISO) 9000 series on quality for example, developing nations face continued constraints in diffusing best practice information on standards and resources necessary to aid in the adoption of appropriate process and production methods (World Bank 2000). In addition, as traditional trade protection measures such as tariffs, quotas, and voluntary export restraint (VER) agreements have been eliminated throughout the 1990s, barriers to trade reflected in use of domestic technical regulations have become much more important channels through which trade is blocked.2 The success of multilateral liberalization through trade talks ending in conclusion of the Uruguay Round in 1994 has highlighted the importance of non-tariff barriers in national standards. Certainly not all market access commitments in the World Trade Organization (WTO) Agreements concluded in the 1994 have been fully implemented or enforced.3 Nor is it the case that barriers to trade such as subsidies to agricultural production or prohibition on foreign investment in services, for example, have been completely eliminated. It is clear, however, that domestic regulation affecting imports through technical requirements, testing, certification, and labeling represent one of the most important new areas for focus in continuing liberalization efforts. Mandatory regulations imposed by governments at the border can produce serious distortions in commercial markets. Domestic regulatory systems may restrain trade and limit market entry...