Whether one likes it or not, domestic regulation is increasingly taking center stage in the theater of international economic relations. Bilateral, regional and multilateral agreements are extending their reach to cover such issues as domestic competition policy, environmental control and labor standards. The agreements are no longer limited to the elimination or reduction of trade barriers at the borders, but cover a wide range of issues once considered to be strictly the domain of national sovereignty. This shift in orientation has taken on an importance that cannot be ignored because the nature of agreements on domestic regulatory policies significantly affect the benefits to be gained from international trade and factor movements and the distribution of these benefits among nations. It is, therefore, important to understand the economic and political motivations of the shift in focus to domestic regulatory polices, to explore the implications of this shift for developed and developing countries, and to sort out the policies that are better negotiated at the international level from those that are better addressed on the home-front or national level.
Author(s): Roger G. Noll