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The Policy Impact of Product-Related Environmental Regulations in Asia

Discussion Papers

No.451

March 2014

ABSTRACT

This paper focuses on EU chemical regulations, RoHS and REACH, and shows these EU regulations have driven Asian countries to introduce regulations that are similar yet modified versions to the EU regulations. Asia as the world manufacturing center has extensive production networks where parts and components of a final good are traded across borders. We discuss how product-related environmental regulations could impact on firms’ activities then show that if Asian countries with complex supply chains introduce different product related chemical regulations without coordinating with neighboring countries, it could work as trade barrier for manufacturing activities in the region.

Keywords: Product-related environmental regulation, trade, RoHS, REACH, Asia
JEL classification: F18, O2

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