Certification of origin as a non-tariff barrier.

Summary The paper proposes to associate certification of origin with a non-tariff barrier in international trade. Indeed, certification of origin often results in both a quantitative restriction and an implicit quality subsidy. We consider the canonical model of international competition in which a domestic firm and a foreign firm compete for the sale of their product on the domestic market. In this framework, we show how the adoption of certification can allow the domestic firm to position itself as a quality leader. If, on the contrary, it offers the lower quality good, consumer surplus can be improved.