TY  - JOUR
AU  - Staiger,Robert W.
AU  - Sykes,Alan O.
TI  - International Trade and Domestic Regulation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15541
PY  - 2009
Y2  - November 2009
UR  - http://www.nber.org/papers/w15541
L1  - http://www.nber.org/papers/w15541.pdf
N1  - Author contact info:
Robert W. Staiger
Department of Economics
Stanford University
Landau Economics Building
579 Serra Mall
Stanford, CA  94305-6072
Tel: 650/723-0533
Fax: 650/725-5702
E-Mail: rstaiger@stanford.edu

Alan O. Sykes
Law School
Stanford University
Stanford, CA 94305
E-Mail: ASykes@law.stanford.edu
AB  - 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.
ER  -