An example would be domestic transportation costs for components of finished export products. If those costs are driven up by regulatory monopolies within nations, they translate directly into higher less-competitive prices in export markets. Domestic regulatory frameworks of nations must adapt quickly to this new environment. If not, their economies and their domestic industries will become marginalized in the face of strong international competition. But adaptation is easier said than done.
Regulations create vested interests.
In many of these cases, those vested interests have strong political constituencies, and governments in democratic societies are sensitive to the next verdict of the ballot box. Indeed, the OECD work on regulatory reform is a critical building block of the international free-trade and investment agenda. Another area of support for free trade with which the OECD is much involved is that of assisting the structural adjustment process in OECD countries necessitated by the globalization process. Yes, regulatory reform often in the form of deregulation and free trade does not reduce jobs in less productive sectors of the economy while creating jobs elsewhere. The OECD analysis demonstrates a major net benefit to all societies through open market structures and liberalized trade.