Harmonization of standards

Question

Quizplus · Accepted Answer

Harmonization of standards can reduce firm costs by eliminating the need to comply with different standards in different markets, and thus making it easier for firms to export their products. It may be more costly for high income countries to harmonize their standards, but the benefits of increased trade and reduced costs for firms often outweigh these costs. Harmonization can be more difficult for dissimilar countries, as they may have very different standards and regulations in place, but it is still possible to achieve some level of harmonization through negotiation and compromise. The idea of a "race to the bottom" suggests that countries will compete to have lower standards in order to attract investment, but this is not necessarily the case with harmonization, which can set higher standards for all participating countries to meet.

Harmonization of Standards