Beyond Tariff Reduction: A Libertarian Approach to Reducing Non-Tariff Barriers

Since the end of the Second World War, average tariff levels have fallen. Today, the most promising pathway for trade liberalization is often regulatory harmonization. This chapter explores three different methods for regulatory harmonization (economic union, mutual recognition, and ad-hoc treaties), arguing that no one method provides for retained national sovereignty, a wide membership, and substantial regulatory harmonization. Instead, a trilemma exists between them. The article argues that mutual recognition, such as that between Australia and New Zealand, is the most libertarian model for reducing non-tariff barriers.