Is Mutual Recognition an Alternative to Harmonization? Lessons on Trade and Tolerance of Diversity from the EU

Abstract

This chapter discusses the lessons from the European Union's (EU) experience with mutual recognition of standards for goods and services that may be applicable to other regional trade agreements (RTA) and the World Trade Organization (WTO). It examines the nature of the dichotomy between mutual recognition and harmonization in an abstract way and discusses the advantages and disadvantages of mutual recognition. It explains that while mutual recognition offers an attractive alternative to harmonized rules it has a self-destructive quality, and while it is effective in enabling trade it rapidly creates the conditions in which domestic lobbies push for harmonized rules.