Governing Lipitor and Listerine: The Domestic Roots of International Pharmaceutical and Cosmetics Regulation

Abstract

Technical standards and product regulations increasingly shape international trade patterns, the organization of cross-national production, and global investment flows. This paper examines the evolution of international market regulation in the pharmaceutical - and cosmetics industries over the past three decades. International market regulation of pharmaceuticals and cosmetics poses an intriguing empirical puzzle. Both industries have seen the emergence and subsequent institutionalization of international market regulation over the last three decades. In similar ways, the mode of international governance has shifted over time in both cases - from occasional international spill-over of domestic rules to deliberate extraterritorial imposition of domestic laws to trans-governmental cooperation aimed at international harmonization. Yet against this background of commonality, we find a sharp divergence in the sectors when it comes to who exerts most influence: in the case of pharmaceuticals, the United States has long been dominant and has only recently seen its leadership challenged by the European Union; in cosmetics, by contrast, the EU has shaped international market regulation from the outset and the US has failed, repeatedly, to make significant inroads. What explains the similar institutional evolution of international market regulation in the two fields and the sharp divergence in terms of policy influence between them?