Technology and Technical Barriers to Trade in a Vertically Differentiated Market

This paper analyzes the economic effects of TBT under the existence of technological asymmetry between countries. It first defines TBTs and shows the current status and evolution of TBTs using descriptive measures. In addition, the paper also compares the technology levels of Korea to those of other countries by referencing the related literature. Next, the paper establishes a theoretical model and analyzes the economic effects of TBTs where technological asymmetry exists between trading partners. It finds the optimal TBT levels of a technologically advanced country and makes some policy suggestions to help a technologically less advanced country cope with those TBTs