This study examines how free trade agreements (FTAs) and customs unions (CUs) affect multilateral trade agreements when countries endogenously determine the standards as well as tariffs. Raising standards reduces the negative consumption externalities of a traded good but increases firms' costs. We find that a deep FTA with the harmonization of standards may be a stumbling block for multilateral free trade with the international standard that maximizes world welfare, whereas a deep CU with standards is a building block. As extensions, we consider asymmetry in firms' production costs and in the awareness of negative externalities between countries as well as transboundary externalities.

中文翻译：

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深度贸易协定和标准协调

本研究探讨了当各国自行决定标准和关税时，自由贸易协定 (FTA) 和关税同盟 (CU) 如何影响多边贸易协定。提高标准会降低贸易商品的负消费外部性，但会增加企业的成本。我们发现，具有统一标准的深度自由贸易协定可能是多边自由贸易与实现世界福利最大化的国际标准的绊脚石，而具有标准的深度 CU 则是基石。作为扩展，我们考虑了企业生产成本的不对称性以及对国家之间负外部性以及跨界外部性的认识。