DIVERGENT ENVIRONMENTAL-REGULATIONS AND TRADE LIBERALIZATION

The market and nonmarket consequences of environmental regulations and of trade liberalization under different regulatory regimes are explor ed in the context of the NAFTA through simulation modeling of the Nort h American sheep and lamb markets. Producers are able to shift much of ;he cost of regulation to domestic and foreign consumers and thus gain from regulation. In the cases investigated, nonmarket effects are unl ikely to reverse the sign of market gains or losses, and ''level playi ng field'' regulations may or may not be preferred.