Self-Enforcing Trade Agreements : Evidence from Time-Varying Trade Policy
This paper estimates a model of a government making trade policy adjustments under a self-enforcing trade agreement in the presence of economic shocks. The empirical model is motivated by the formal theories of cooperative trade agreements. The aut...
| Main Authors: | , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100301085442 http://hdl.handle.net/10986/3710 |
| Summary: | This paper estimates a model of a
government making trade policy adjustments under a
self-enforcing trade agreement in the presence of economic
shocks. The empirical model is motivated by the formal
theories of cooperative trade agreements. The authors find
evidence that United States' use of its antidumping
policy during 1997-2006 is consistent with increases in
time-varying "cooperative" tariffs, where the
likelihood of antidumping is increasing in the size of
unexpected import surges, decreasing in the volatility of
imports, and decreasing in the elasticities of import demand
and export supply. The analysis finds additional support for
the theory that some US antidumping use is consistent with
cooperative behavior through a second empirical examination
of how trading partners responded to these new US tariffs.
Even after controlling for factors such as the expected cost
and benefit to filing a WTO dispute or engaging in
antidumping retaliation, the analysis find that trading
partners are less likely to challenge such
"cooperative" US antidumping tariffs that were
imposed under terms-of-trade pressure suggested by the theory. |
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