Summary

This study looks at the impacts of EU standards on African Exports of textiles, clothing and footwear, focusing on voluntary technical regulations. The key issue the authors are trying to address is how to limit the costs and negative spillovers that product standards can bring. They contend that the answer is not to remove standards, since they have an important role to play, but to analyse what can make standards less restrictive on trade. They identify two types of costs associated with standards and trade: fixed costs of production adaptation to meet foreign standards, and the marginal cost of demonstrating conformity. Their econometric analysis provides empirical evidence of the inhibiting effect of voluntary EU standards on African exports of textiles, clothing and footware. However, estimation results show that EU standards in these sectors that are de facto harmonized with ISO standards do not hold back trade to the same extent as non-harmonized ones.Evidence thus points to de facto harmonization with ISO standards having the capacity to be trade promoting.

Abstract

We test the hypothesis that product standards harmonised to de facto international standards are less trade restrictive than ones that are not. To do this, we construct a new database of European Union (EU) product standards. We identify standards that are aligned with International Organisation for Standardisation (ISO) standards (as a proxy for de facto international norms). We use a sample-selection gravity model to examine the impact of EU standards on African textiles and clothing exports, a sector of particular development interest. We find robust evidence that non-harmonised standards reduce African exports of these products. EU standards which are harmonised to ISO standards are less trade restricting. Our results suggest that efforts to promote African exports of manufactures may need to be complemented by measures to reduce the cost impacts of product standards, including international harmonisation. In addition, efforts to harmonise national standards with international norms, including those through the World Trade Organisation Technical Barriers to Trade Agreement, promise concrete benefits through trade expansion.

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