International convergence in regulation: The case of measurable standards

Recent literature on competition in regulation concludes that the iterative adjustment that may start with mutual recognition is an open-ended process. This paper shows that, even without acceptance of reciprocal minimum standards, a process of iterative adjustment may be triggered by the coexistence of foreign goods with high standard levels and domestic goods with relatively low standard levels. Focusing on the case of international heterogeneity of levels of a specific standard, the paper offers an intuitive counter-argument to the fear that free trade necessarily implies a “race to the bottom“ of standard levels.