International Trade and Domestic Regulation

49 Pages Posted: 13 Nov 2009 Last revised: 4 Dec 2009

Robert W. Staiger

Stanford University; University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Alan O. Sykes

Stanford University - Law School

Multiple version iconThere are 2 versions of this paper

Abstract

Existing formal models of the relationship between trade policy and regulatory policy suggest the potential for a regulatory race to the bottom. WTO rules and disputes, however, center on complaints about excessively stringent regulations. This paper bridges the gap between the existing formal literature and the actual pattern of rules and disputes. Employing the terms-of-trade framework for the modeling of trade agreements, we show how large "nations" may have an incentive to impose discriminatory product standards against imported goods once border instruments are constrained, and how inefficiently stringent standards may emerge under certain circumstances even if regulatory discrimination is prohibited. We then assess the WTO legal framework in light of our results, arguing that it does a reasonably thorough job of policing regulatory discrimination, but that it does relatively little to address excessive nondiscriminatory regulations.

Keywords: international trade, regulation, national treatment, technical barriers to trade

Suggested Citation

Staiger, Robert W. and Sykes, Alan O., International Trade and Domestic Regulation. Stanford Law and Economics Olin Working Paper No. 387; Stanford Public Law Working Paper No. 1504913. Available at SSRN: https://ssrn.com/abstract=1504913 or http://dx.doi.org/10.2139/ssrn.1504913

Robert W. Staiger

Stanford University ( email )

Stanford, CA 94305
United States

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-2265 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alan O'Neil Sykes (Contact Author)

Stanford University - Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Paper statistics

Downloads
377
Rank
56,355
Abstract Views
2,077