177
Interest in U.S. trade policy has been stimulated in recent years by the massive American trade deficit, by the belief that intervention by foreign governments in international markets has given other countries a competitive edge over the United States, and by concern about the increase in protectionism among industrial countries. In turn, major analytical developments in international economics have revolutionized trade theory, broadening its scope both by introducing in a more formal manner such concepts as imperfect competition, increasing returns, product differentiation, and learning effects and by including the study of political and economic factors that shape trade policy decisions. This collection of papers—the result of a conference held by the NBER—applies these trade theories to existing world cases and also presents complementary empirical studies that are grounded in more traditional trade theories. The volume is divided into four parts. The papers in part 1 consider the problem of imperfect competition, empirically assessing the economic effect of various trade policies introduced in industries in which the trade theory seems to apply. Those in part 2 isolate the effects of protection from the influences of the many economic changes that accompany actual periods of protection and also examine how the effects from exogenous changes in economic conditions vary with the form of protection. Part 3 provides new empirical evidence on the effect of foreign production by a country's firms on the home country's exports. Finally, in part 4, two key bilateral issues are analyzed: recent U.S.-Japanese trade tensions and the incident involving the threat of the imposition of countervailing duties by the United States on Canadian softwood lumber.
23Japanese exports, MNC affiliates, and rivalry for export markets
Japanese exports, MNC affiliates, and rivalry for export markets
10Explaining protectionism and liberalization in European Union trade policy: the case of textiles and clothing
The political economy of trade policy models and theories of European Union (EU) policy-making can explain only the incidence of protectionism or inertia in EU trade policy. To address this weakness, this article proposes an alternative approach based on state-society interaction under different degrees of issue transparency/divisibility. In this perspective, four endogenous policy outcomes may emerge: strict protectionism, selective protectionism, selective liberalization and dominant liberalization. The conclusion is that the level of protectionism is determined by the level of issue transparency/divisibility rather than the level of protectionist demands. This conclusion — based on the functionality of European integration in equalizing the rates of returns on societal loyalty to a territorial jurisdiction — is tested against evidence on the evolution of the EU's textiles and clothing policy during the Multifibre Arrangement and Uruguay Round negotiations. The evidence lends support to this argument and suggests that regional integration, in contrast to the unqualified claims of its opponents and proponents, is conducive to both protectionism and liberalization — depending on the extent to which trade policy issues are treated as transparent/divisible.
Read more1The Evolution of Ukrainian Economy: New Trade Theory Evidence
The Evolution of Ukrainian Economy: New Trade Theory Evidence
5Industrial Organization and Export Competitiveness of U.S. Food Manufacturers
Domestic income multipliers associated with U.S. exports of processed and other high-value agricultural products such as meats and manufactured foods are shown to be about 55 percent greater than those for exports of primary agricultural commodities such as grains and oilseeds. About 90 percent of the high-value product exports originate in the food manufacturing industries. Yet, when expressed in terms of export propensity, the external market performance of U.S. food manufacturers trails substantially behind that of similar industries in other countries. The U.S. food manufacturing industries are characterized by competitive imperfections such as product differentiation, scale economies, and seller concentration. Traditional international trade theories based on factor endowment constructs have not proved robust in explaining trade flows under such imperfectly competitive conditions. Recently some economists have applied industrial organization concepts to international markets that are imperfectly competitive. Linkages have been established both between elements of imperfect competition and external market performance, and between international trade and economic welfare in imperfectly competitive markets. This paper reports on an industrial organization-based analysis of the export market performance of U.S. food manufacturers. The analysis utilizes panel data from 78 leading food processing firms and cross-sectional Census data from 42 4-digit SIC food manufacturing industries. Export market performance varies widely among these firms and industries. About 84 percent of the variation was explained through the use of industrial organization characteristics as explanatory variables in regression analysis. Food manufacturer export propensity was found to be significantly and positively related to firm size, research and development, and product transportability, and significantly and negatively related to advertising, vertical coordination in sourcing of raw agricultural commodities, wage rates, and height of foreign import barriers. Other explanatory variables that show promise, pending adequate data, include the extent to which firms operate foreign plants, seller concentration, and investor vs. cooperative firm ownership. Alternative measures of international market performance, including export market share, relative export advantage, and revealed competitiveness, are also examined.
Read more27Impact of outward FDI on home country exports
Purpose The relationship of outward foreign direct investment (OFDI) with home country's exports has significant implications for policymakers as well as business managers of MNEs. Since BRICS nations have emerged as important sources as well as destinations of FDI, this paper aims to study the impact of OFDI from these countries on home country exports by using panel data for BRICS for time period 1993–2015. Design/methodology/approach The author use panel unit root tests, panel cointegration, VECM and causality tests in the study. Findings The results reveal that OFDI has a negative and significant impact on home country exports indicating that outward FDI is a substitute for exports in these countries. It also indicates long-run causality from exports towards OFDI. There is no long-run causality running from OFDI to exports, suggesting that MNEs do not “connect” with home economies' firms through forward and backward linkages in value chain. Practical implications From the point of view of policymakers, it implies a net outflow of capital as the outflow of foreign investment would not be matched by any incremental export earnings since exports are getting substituted by production abroad. For business managers, it is indicative of a growing foreign market that warrants large scale production and justifies the high cost and risk involved in FDI as a mode of entry compared to exports. Originality/value To the best of authors' knowledge, this is the first attempt to deal with the relationship between home country exports and OFDI, for an important group of emerging market economies, i.e. BRICS. The understanding of this relationship allow us to identify whether factors contributing to OFDI from emerging economies are “tied” to their home economies thereby making exports necessary or are rather based on firm specific competencies which are leveraged in different locations to cater to expanding markets.
Read more3Private Standards and Trade
8 Private standards and trade Tim Josling I. INTRODUCTION Among the more intriguing developments in international agricultural and food trade over the past decade has been the rapid growth in the number and scope of private standards. These standa...
Read more1The Agreement on Agriculture: Setting the Scene
Agriculture has been the unruly horse of the GATT/WTO system for a long time and efforts to halter it are still ongoing. This Research Handbook focuses on aspects of agricultural production and trade policy that are recognized for their importance but are often kept out of the limelight, such as the implication of national and international agricultural production and trade policies on national food security, global climate change, and biotechnology. It provides a summary of the state of the WTO agriculture negotiations as well as the relevant jurisprudence, but also, and uniquely, it focuses on the new and emerging issues of agricultural trade law and policy that are rarely addressed in the existing literature.
Read more1GMOs: Trade and Welfare Impacts of Current Policies and Prospects for Reform
Agriculture has been the unruly horse of the GATT/WTO system for a long time and efforts to halter it are still ongoing. This Research Handbook focuses on aspects of agricultural production and trade policy that are recognized for their importance but are often kept out of the limelight, such as the implication of national and international agricultural production and trade policies on national food security, global climate change, and biotechnology. It provides a summary of the state of the WTO agriculture negotiations as well as the relevant jurisprudence, but also, and uniquely, it focuses on the new and emerging issues of agricultural trade law and policy that are rarely addressed in the existing literature.
Read more7Trade policy in a changing world economy
Trade policy issues are no longer solely the concern of a few government specialists and academics. Manufacturers, businesspeople, educators, and government officials must keep abreast of laws and regulations relating to trade, the economic consequences of various trade measures, and current trends in policy, but there have been few coherent sources for such information. Trade Policy in a Changing World Economy provides a clear introduction to complex trade issues, covering theoretical issues of trade policy, the changing nature of American trade policy, the changing nature of American trade policy since World War II, multilateral trade negotiations, and trade strategies. The volume is particularly timely as the world's nations enter a new round of GATT negotiations for the reduction of trade barriers.
Read more92International Trade and Trade Policy
Centering on questions of the potential optimality of some trade protection, these original contributions present research at the frontier of international trade trade policy. They expand test the new trade theory that has developed during the last decade, incorporating elements of industrial organization political economy into the study of trade structure the formation of trade policy.Essays in the first two parts take up trade policy, addressing issues such as the formation of trading blocks, strategic trade policy, the political economy of protection, growth-oriented trade policies, including empirical studies of the welfare effects of quality - upgrading voluntary export restrictions import quotas. Essays in the third part discuss various structural issues such as trade in services, intersectoral adjustments, the advantage of early entry.Contents: Policy: Theory. Is Bilateralism Bad? Paul R. Krugman. Strategic Policy Direct Foreign Investment: When Are Tariffs Quotas Equivalent? James A. Levinsohn. Making Altruism Pay in Auction Quotas, Kala Krishna. On the Ineffectiveness of Made-to-Measure Protectionist Programs, Aaron Tornell. Subsidies Price Competition, Peter Adverse Selection in Credit Markets Infant Industry Harry Flam and Robert W. Staiger. Protection, Politics, Market Structure, Arye L. Hillman. Growth Welfare in a Small Open Economy, Gene M. Grossman and Elhanan Helpman. Trade Policy: Evidence. Quality Upgrading Its Welfare Cost in U.S. Imports, 1969-74, Randi Boorstein and Robert C. Feenstra. Counting the Cost of Voluntary Export Restraints in the European Car Market, Alasdair Smith and Anthony J. Venables. Structural Issues. Services in International Trade, Wilfred J. Ethier and Henrik Horn. First-Mover Advantages, Blockaded Entry, the Economics of Uneven Development, James R. Markusen. Wage Sensitivity Rankings Temporal Convergence, Ronald W. Jones and Peter Neary.
Read more3Old and new trade policies
Latin American development strategies have historically been inextricably linked with trade theory and policy. The author’s main argument is that the old infant industry and the new strategic trade arguments are fundamentally similar. Among their similarities is the justification of selective protection of certain economic sectors. Among their differences, the infant industry argument justifies temporary protection, while the argument in favour of strategic protection of certain industries justifies their protection on an indefinite basis.
Read moreDifferentiated protectionism in the European Union: The role of superstar exporters and fiscal capacity
What factors drive trade-harmful protectionist policy interventions enacted by European Union (EU) member states? Although EU trade policy is placed under supranational competence, we highlight that trade policy decisions differ within and across the EU national governments. We explain this variation by building on the New New Trade Theory and argue that sectors dominated by highly productive ‘superstar exporters’ are less likely to receive protectionist support, yet governments with greater fiscal capacity are more likely to support these same sectors through non-tariff instruments such as subsidies – and, occasionally, even tariffs. Using data from the Global Trade Alert (2012–2022) and relying on Poisson regression analyses, we find support of our argument. These findings contribute to the literature on EU trade policy, New New Trade Theory and the domestic foundations of trade policy under supranational governance by highlighting the interaction between sectoral competitiveness and fiscal capacity.
Read more8A comparative analysis of EU and US trade policies towards least developed countries and the African Growth and Opportunity Act beneficiaries
MotivationThe European Union (EU) and the US have specific trade preference programmes in place directed towards developing countries in general and, primarily in the case of the EU, towards least developed countries (LDCs) in particular. This article examines the relative merits of these programmes.PurposeThe article compares the trade policies of the EU and the US with respect to LDCs and the countries eligible for the US African Growth and Opportunity Act (AGOA) and examines the relative success of the two donors’ trade policies vis‐à‐vis these two groups of beneficiaries in terms of increasing imports from them.Approach and methodsEconometric evidence from a gravity model is used to compare the effects of EU and US preferential trade policy on imports from the beneficiary countries. First, regressions are carried out using total EU and US imports as dependent variables and, second, EU and US duty‐free imports are used.FindingsThe descriptive part of the article shows that (a) a larger share of EU imports benefits from duty‐free MFN tariffs; (b) the EU offers preferences on all imports from the LDCs (except arms and ammunition), while the US extends preferences to three quarters of all imports; (c) EU preferences are better utilized; and (d) the EU imports more goods duty free. The econometric analysis shows that EU trade policy towards the LDCs and the AGOA beneficiaries has generated approximately twice as much in imports as US policy, when imports of mineral fuels are excluded from the analysis.Policy implicationsEU trade policy is found to outperform US trade policy in terms of generating imports from the LDCs and the AGOA beneficiaries. Hence, if any trade policy ought to be copied by other countries, as suggested by some observers, it should be EU trade policy rather than US trade policy.
Read more91Applied International Trade Analysis
PART 1: THE TRADING WORLD: PATTERNS AND POLICY The Pattern of International Trade and Factor Flows The Instruments and Environment of Trade Policy PART 2: COMPETITIVE MARKETS: TRADE AND TRADE POLICY The Ricardian Framework The Factor-Abundance Model Trade Policy Factor Specificity, Mobility and Unemployment Multidimensional Extensions of Trade Theory Empirical Tests of the Factor-Abundance Model PART 3: IMPERFECTLY COMPETITIVE MARKETS: TRADE AND TRADE POLICY Imperfect Competition Trade Policy in Imperfectly Competitive Markets Multinational Production PART 4: SPECIAL TOPICS Economic Integration Exchange Rates and International Trade Growth and International Trade Appendix: Data Methods and Sources References and Additional Reading
Read more12Trade and Trade Policy in Endogenous Growth Models
Since the late 1980s, trade theorists have been aware that trading opportunities and trade policy can have important, and lasting, effects on a nation's rate of economic growth. Conversely, since the time of Edgeworth, Mill and Ricardo trade economists have been studying the consequences of ongoing improvements in technology and growth of factor endowments for trading opportunities and trade policy. I follow this division of labour by specializing this review in a similar, and, I hope, complementary manner. The first goal of this chapter is to synthesize the major theoretical results from the new growth theory linking international trade and trade policy to permanent and lasting effects on growth rates. The second goal is to study how the consequences of ongoing endogenous growth may affect the incentives governments have to restrict trade at a point in time, and how endogenous growth can shape and limit the form of self-enforcing trade liberalizations that are supportable over time.
Read more
Copyright 2026 Cactus Communications. All rights reserved.
