the process of negotiating them for the Asia Pacific region. MRAs can be both bilateral and multi-lateral as well as single- and multi-sector. While APEC MRAs, for example have been single-sector, the EU has generally adopted a multi-sector approach since negotiations of a multi-sector framework are arguably easier, as a rough balance of gains is more easily obtained. Further, G-to-G MRAs can be grouped into 3 different types: i) full harmonization of conformity assessment, ii) equivalence of compliance (a unilateral recognition of compliance), iii) full recognition of conformity assessment (conceptually these are similar to arrangements concerning standards directly – see definitions given in this context above). An example for full harmonization of conformity assessment regulation would be the EU’s Single Market framework. Equivalence of compliance is the basis to the TransTasman MRA between Australia and New Zealand, while the bulk of G-to-G MRAs relies on the third category of full recognition of conformity assessment results. The latter means partners are testing and certifying products according to the standards and requirements of the importing country; subsequently, a certificate indicating full compliance with those requirements is issued by the exporting country and must be accepted by the importer.<sup>7</sup> -<sup>8</sup> The main concern of the subsequent analysis will be to estimate the impact of regional TBT liberalization, in particular the effects of two specific types of initiative: Mutual Recognition Agreements on testing procedures as well as harmonization of product standards. For all other approaches the degree of implementation is difficult to judge in practice. Legal texts are often vague to the extent that they only recommend certain measures rather than being binding in this respect. The impact of MRAs on trade will be tested only for members of the agreement, while the effects of harmonization will be tested both for members of the liberalizing region as well as excluded countries.

# **SECTION II**

# **Literature**

The relationship between standards and trade has only recently started to receive attention from researchers. The main strands of the standards-literature have so far been more concerned with the link between standards and innovation and standards and growth.<sup>9</sup> Firm level surveys have been conducted, attempting to gauge the direct impact of standards and technical regulations on firms’ production costs and hence export performance. The World Bank TBT survey looks at 689 firms in over 20 industries in 17 developing countries (Wilson and Otsuki, 2004). 70% of these firms report that they face technical regulations in their export markets, whereby EU and US

> 7 Based on ibid.

> 8 For a full list of MRAs and Harmonization initiatives, please refer to Appendix IV and V.

> 9 For general overviews of the standardisation literature see Farrell and Saloner (1987), David and Greenstein (1990), Katz and Shapiro (1994) and Matutes and Regibeau (1996); the small part of the literature that is concerned with trade issues is represented by Matutes and Regibeau (1996), Kende (1992), Gandal and Shy (1996), Wallner (1998), Jeanneret and Verdier (1996) and DIN (Deutsches Institut für Normung, 1999); e.g. Blind and Jungmittag (2004), Jungmittag, Blind and Grupp (1999).

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