Consequences of Trade Regulations on International Trade in Remanufacturing

Abstract

The remanufacturing industry is experiencing a gradual increase in international trade. Accordingly, manufacturers are encountering a multitude of regulations in this cross-border trade of remanufactured products, such as import prohibitions/bans, environmental regulations, and tariff barriers. In this paper, we investigated the implications of exporting remanufactured products to the international market with or without trade regulations. Our analysis reveals that, although the international market for remanufacturing invariably benefits the manufacturer, trade regulations are a disadvantage to remanufactured exports. Thus, while the quality of remanufactured products increases, the adverse effect of trade regulations could be weakened. Additionally, we reveal that trade regulations may be detrimental to the environment with a higher rate of used core collection and disposal impact. Thus, policymakers should take care to regulate the international market for remanufactured goods rather than implementing a one-size-fits-all solution.