HARMONIZING STANDARDS AS INSTITUTIONS Monika Tothova and James F. Oehmke (Paper Presented on the 7th International Conference on "Institutions in Transitions", Kranjska Gora, Slovenia, June 19-20, 2003) Integration efforts of the Central and Eastern European (CEE) countries are gradually materializing. Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, and in addition to Cyprus and Malta, are to join the EU on May 1 2004 after the Accession Treaty is ratifiedthusiasm is apparent in every accession country, less optimistic opinions are also voiced. One of the first short- and medium-term priorities in each country was to establish and consolidate standardization and conformity assessment structures. While the concept of "deeper integration beyond abolition of import tariffs and quotas, to further measures to remove market segmentation and promote integration" (Venables 2000) is by and large not questioned, critical views on potential losses of national standards harming national identity – i.e., what constitutes "rum", and how to address cheeses made from non-pasteurized sheep milk – are seen as well. The issue of "lost national standards" is repeated: in 1987 the EU (then European Community) published its visionary plan on new, standardized Europe of 1992; a gain of 7 per cent of European income was estimated from harmonization (Emerson 1988, p.6). Even then British were opposed to some parts of it, claiming "brilliant green mushy peas" and "pink sausages" are part of their national identity, and eventually succeeded in getting the necessary exemptions (Krugman and Obstfeld 2002). Although the harmonization issue has been on the tables in Brussels at least since the late 1980s, it yet has to be concluded. Over the years "new" approach replaced the "old" one: instead of imposing technical solutions, the EU legislation is limited to establishing the essential requirements which products must meet (EC 2003). Differences in quality standards are protected by World Trade Organization's (WTO) recognition of countries' right to adopt the standards they consider appropriate – i.e., for human, animal or plant life or health, for the protection of the environment or to meet other consumer interests assuming their use is justified and they are not used as barriers to trade (WTO 2003). Although countries are urged to apply international food standards (when existing), suggestions of Codex Alimentarius result is a variety of standards and technical regulations across the world and consequent welfare losses. Reaching out for an example from outside Europe, tolerance levels for