[A version of this posting appears on the East Asia Forum blog.]
Those opposed nowadays to greater economic integration through the WTO or free trade agreements typically assume that this will undermine consumer protection, especially due to more unsafe goods coming into local markets. But as David Vogel documented in the mid-1990s for the US, we often find “trading up” to higher safety standards. Partly this is because exporters may need to improve safety features to comply with requirements set by public or private law in the destination country. It is then often inefficient to remove such features for products also sold into local markets, where requirements may initially be lower, or if features are removed consumers and regulators in local markets will more readily press for local safety standards to be raised.
FTAs and other international agreements can also facilitate enactment of better consumer product safety laws. The EU was an early example. In 1979, the Treaty of Rome was interpreted to require “mutual recognition”: goods produced to safety standards required in one EU country would be deemed to satisfy standards in an importing country. But to avoid a “regulatory race to the bottom”, the EU also developed a new and more effective approach to setting joint minimum safety standards.
Intriguingly, Southeast Asia is experiencing similar developments. …
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