Ambiguous protection

Abstract

Import regulations are globally the most prevalent form of intervention in international trade. The regulations should, under rules of the WTO, protect consumers and the environment but can be used to protect producers. We investigate the ambiguity of intent of the regulations. We set out a model that when applied empirically suggests, as a benchmark estimate, equal divide between social benefit and producer protection. Inefficiency and distributional effects of the regulations are consistent with producer-protecting trade policy. Country diversity in use of regulations supplements our estimates in suggesting presence of producer-protecting intent. We look at how WTO procedures have allowed producer protection in the guise of social benefit.