Quarantine policy reviews are becoming more sophisticated following the Uruguay Round?s Agreement on Sanitary and Phytosanitary (SPS) Measures and, in Australia?s case, following also the 1996 Nairn Report. Yet they still focus primarily on the effects of restrictions just on import-competing...

This paper examines Krugman's (1984a) argument that under increasing returns to scale import protection may act as a form of export promotion. We formally prove Krugman's result by explicitly using stability conditions for a multimarket Nash equilibrium. However, if marginal costs were...