“In 2012, Pakistan signed a five-year engagement plan with the European Union that paved way for its inclusion in EU’s Generalized System of Preferences (GSP) to allow duty free access to Pakistan’s exports. The GSP entailed a major harmonization of regulatory standards and led to a dramatic increase in the application of non-tariff measures across the entire manufacturing space. Some sectors experienced higher NTM introductions than others.

Using this rich empirical setting, we will conduct three levels of empirical enquiry. Firstly, we probe whether sectors with special interest groups represented by strong business lobbies or politically connected firms were able to secure higher levels of non-tariff protection in the wake of the 2013 trade policy shock. Secondly, we will investigate whether sectors subjected to higher levels of NTMs in 2013 experienced a slower subsequent growth in exports. Finally, we will estimate a structural political economy model of trade protection that accounts for government-industry interaction (Grossman and Helpman, 1992). To this end, we use information on three major trade policy instruments in Pakistan: tariffs, non-tariff measures, and regulatory duties.”