PROTECTION FOR WHOM?

These internal barriers notwithstanding, resources did eventually move (at least in some countries) and exports are a big part of the remarkable success stories of East Asia in particular.

It has been argued that regulations often serve to keep imports out. California avocado producers successfully lobbied for a complete federal ban on Mexico Hass avocados from 1914 until 1997. This was on the grounds of keeping Mexican pests out, despite the facts that Mexico is territorially adjacent and that pests do not require visas to cross the border. In 1997, the federal ban was lifted but remained in effect in California until 2007. More recently, researchers found that during the 2008 crisis in the United States, the Food and Drug Administration suddenly became more likely to refuse, on food-safety grounds, shipments of imported foods coming from developing countries; for exporters from developing countries, the cost associated with shipments being refused quadrupled during the period! Obviously, the quality of shipments from Mexico could not have changed because of the subprime crisis in the United States, but because demand for avocados went down, it became all the more valuable to keep them out to protect local growers.³⁰ Domestic pressures for protection mount during bad times and safety regulations are often used as an excuse to protect the domestic producers.

That said, some of these standards also reflect genuine consumer preferences for safety (e.g., some Chinese toys have been found to contain lead), the protection of the environment (e.g., pesticide use in agricultural products), or the condition of workers (e.g., child labor). Indeed, the success of the Fairtrade branding shows that many consumers are willing to pay more to intermediaries who can assure them that a product meets some environmental and ethical standards. And, partly inspired by this, many well-known brand names these days impose quality standards over and above any regulatory requirements, making it even harder for new exporting countries to enter.