The principle of mutual recognition - A source of divergence ?

Governments set numerous norms to protect consumers. Two countries may achieve the same level of protection of their consumers through different specifications. The adaptation costs induced by these differences create barriers to trade. The principle of mutual recognition addresses the problem by ensuring that products lawfully manufactured in one country are acceptable without adaptation in another country. We show that by shifting the transaction costs of adapting to several norms from firms to consumers the principle of mutual recognition creates disparities across countries and is (more) beneficial to larger countries.technical barriers to trade, mutual recognition, economic geography, home market effect

REGULATORY TARGETS AND REGIMES FOR FOOD SAFETY: A COMPARISON OF NORTH AMERICAN AND EUROPEAN APPROACHES

Food quality, international trade, harmonization, mutual recognition, Food Consumption/Nutrition/Food Safety,

Mutual Recognition: economic and regulatory logic in goods and services. Bruges European Economic Research (BEER) Papers 24/June 2012

Mutual recognition is one of the most appreciated innovations of the EU. The idea is that one can pursue market integration, indeed "deep' market integration, while respecting 'diversity' amongst the participating countries. Put differently, in pursuing 'free movement' for goods, mutual recognition facilitates free movement by disciplining the nature and scope of 'regulatory barriers', whilst allowing some degree of regulatory discretion for EU Member States. This BEER paper attempts to explain the rationale and logic of mutual recognition in the EU internal goods market, its working in actual practice for about three decades now, culminating in a qualitative cost/benefit analysis and its recent improvement in terms of 'governance' in the so-called New Legislative Framework (first denoted as the 2008 Goods package) thereby ameliorating the benefits/costs ratio. For new (in contrast to existing) national regulation, the intrusive EU procedure to impose mutual recognition is presented as well, with basic data so as to show its critical importance to keep the internal goods market free. All this is complemented by a short summary of the scant economic literature on mutual recognition. Subsequently, the analysis is extended to the internal market for services. This is done in two steps, first by reminding the debate on the origin principle (which goes further than mutual recognition EU-style) and how mutual recognition works under the horizontal services directive. This is followed by a short section on how mutual recognition works in vertical (i.e. sectoral) services markets

The International Bar Association and Trade in Legal Services: Meta Law-Making in International Economic Law?

This article presents the International Bar Association as a highly-influential but often overlooked non-state actor through the lens of its involvement in the standardization of Mutual Recognition Agreements (MRA)s for legal services. Not only do most MRAs contemplate the active involvement of professional bodies such as law societies and bar associations in their construction and monitoring, the IBA’s guidelines for MRAs inform the content of these agreements, facilitating the practice of international law by a more highly mobile profession. This in turn underpins the capacity of the community of international lawyers to exercise their technical expertise to influence other non-state actors, exemplifying what may be described as the IBA’s “meta-lawmaking” on the global stage. As there has been poor uptake of MRAs by developing countries, initiatives of the IBA could help establish mutual recognition for legal services in the developing world

International Strategic Choice of Minimum Quality Standards and Welfare

We study the influence of minimum quality standards in a two-region partial-equilibrium model of vertical product differentiation and trade. Three alternative standard setting arrangements are considered: Full Harmonization, National Treatment and Mutual Recognition. The analysis integrates the choice of a particular standard setting alternative by governments into the model. We provide a set of sufficient conditions for which Mutual Recognition emerges as one regulatory alternative that always improves welfare in both regions when compared to the case without regulation. We show that Mutual Recognition, being the default procedure if governments do not reach a unanimous decision, is the only possible equilibrium of the game.product differentiation, oligopoly, trade, quality standards, policy coordination