ABSTRACT
There has been a dramatic shift in the focus of trade policy concerns from the barriers that lie at the border to the barriers which exist ‘within the border’.1 The GATT/WTO and many other trading arrangements have been largely successful in reducing both the levels of tariffs worldwide and the scale of other border measures such as quotas. This has revealed a new and more subtle category of measures which restrict trade-the numerous commonplace regulations which governments enact to protect the health and safety of their citizens and the environment in which they live. Such regulations vary tremendously across borders: one nation’s bunch of grapes is another nation’s repository of carcinogenic pesticide residue. This effort to protect citizens from the hazards of everyday life has become a virtual minefield for trade policy-makers, as such differences can often be manipulated or exploited to protect domestic industry from international competition.2
Even when there is no protectionist intent on the part of lawmakers, through a lack of coordination, mere differences in regulatory or standard-setting regimes can function to impede trade. It has thus become increasingly difficult to delineate the boundaries between a nation’s sovereign right to regulate and its obligation to the international trading community not to restrict trade gratuitously. The question of how to address this problem has received increasing attention from trade scholars. As Miles Kahler states, ‘the decadeslong process of lowering trade barriers resembles the draining of a lake that reveals mountain peaks formerly concealed or (more pessimistically) the peeling of an onion that reveals innumerable layers of barriers.’3
