This paper introduces a new data set and establishes a set of basic facts and patterns regarding the trade that countries fight about under World Trade Organization (WTO) dispute settlement. ... See More + The paper characterizes the scope of products, as well as the levels of and changes to the trade values, market shares, volumes, and prices for those goods that eventually become subject to WTO litigation. The first result is striking heterogeneity in the level of market access at stake across disputes: for example, 14 percent of cases over disputed import products feature bilateral trade that is less than $1 million per year and another 15 percent feature bilateral trade that is more than $1 billion per year. Nevertheless, some strong patterns emerge from a more detailed examination of the data. Both high- and low-income complainants tend to suffer important losses in foreign market access in the products that ultimately become subject to dispute. Furthermore, although the respondentapos;s imposition of an allegedly WTO-inconsistent policy is associated with reductions, on average, in trade values, volumes, and exporter-received prices, there is some evidence of differences in the size of these changes across the different types of policies under dispute and the potential exporter country litigants. Finally, these different types of policies under dispute can have dissimilar trade effects for the complainant relative to other (non-complainant) exporters of the disputed product and this is likely to affect the litigation allegiance of third countries. See Less -
Policy Research Working Paper WPS6979 JUL 01, 2014
Bown, Chad P.; Reynolds, Kara M.
Two of the most important trade policy developments to take place since the 1980s are the expansion of preferential trade agreements and temporary trade barriers, such as antidumping, safeguards, and countervailing duties. ... See More + Despite the empirical importance of preferential trade agreements and temporary trade barriers and the common feature that each can independently have quite discriminatory elements, relatively little is known about the nature of any relationships between them. This paper surveys the literature on some of the political-economic issues that can arise at the intersection of preferential trade agreements and temporary trade barriers and uses four case studies to illustrate variation in how countries apply the World Trade Organizationapos;s global safeguards policy instrument. The four examples include recent policies applied by a variety of types of countries and under different agreements: large and small countries, high-income and emerging economies, and free trade areas and customs unions. The analysis reveals important measurement and identification challenges for research that seeks to find evidence of systematic relationships between the formation of preferential trade agreements, the political-economic implications of their implementation, and the use of subsequent temporary trade barriers. See Less -
Policy Research Working Paper WPS6898 JUN 01, 2014
Bown, Chad P.; Karacaovali, Baybars; Tovar, Patricia
This paper surveys political-economic research on the variety of instruments that governments use to conduct international trade policy. It presents key insights on the relationships between instruments such as tariffs, quotas, voluntary export restraints, and other nontariff barriers, as well as the ebb and flow of the national use of temporary trade barriers such as antidumping, countervailing duties, and safeguards. ... See More + The survey examines trends in use of these trade policy instruments over recent history; and it reviews the major theoretical and empirical explanations behind, and interrelationships between, their uses. Finally, the paper highlights potential institutional impacts of the General Agreement on Tariffs and Trade (GATT) and subsequent World Trade Organization (WTO) on choice of policy instruments, as well as how multilateral, unilateral, and preferential tariff liberalization may introduce political-economic shocks and affect incentives over time for how governments rely on different instruments. See Less -
Policy Research Working Paper WPS6757 JAN 01, 2014
Bown, Chad P.
Use of temporary trade barriers has proliferated across countries, industries, and even policy instruments. This paper constructs a panel of bilateral, product-level United States steel imports that are matched to a unique data set on trade policy exclusions that are associated with the 2002 United States steel safeguard in order to compare the trade impacts that result from application of various temporary trade barrier policies over 1989-2003. ... See More + The analysis finds that the trade effects of an applied safeguard -- which is statutorily expected to follow the principle of nondiscriminatory treatment -- can nevertheless compare closely with the application of the explicitly discriminatory antidumping policy. The results on trade policy substitutability complement other recent research on these increasingly important forms of import protection. See Less -
Policy Research Working Paper WPS6378 MAR 01, 2013
Bown, Chad P.
This paper estimates the impact of aggregate fluctuations on the time-varying trade policies of thirteen major emerging economies over 1989-2010; by 2010, these WTO member countries collectively accounted for 21 percent of world merchandise imports and 22 percent of world GDP. ... See More + The paper examines determinants of carefully constructed, bilateral measures of new import restrictions on products arising through the temporary trade barrier (TTB) policies of antidumping, safeguards, and countervailing duties. The paper presents evidence of a counter-cyclical relationship between macroeconomic shocks and new TTB import restrictions as well as an important role for fluctuations in bilateral real exchange rates. Furthermore, the trade policy responsiveness coinciding with WTO establishment in 1995 suggests a significant change relative to the pre-WTO period; i.e., new import restrictions became more counter-cyclical and sensitive to real exchange rate shocks over time. Finally, the paper also presents results that explicitly address changes to the institutional environment facing these emerging economies as they joined the WTO and adopted disciplines to restrain their application of other trade policies such as applied import tariffs. See Less -
Policy Research Working Paper WPS6315 JAN 01, 2013
Bown, Chad P.; Crowley, Meredith A.
Trade policy commitments to lower import tariffs and to maintain tariffs at low levels entail short and long-run political-economic costs and benefits. ... See More + Empirical work examining the relationship between such commitments and the exercise of trade policy flexibilities is still relatively nascent, especially for emerging economies. This paper provides a rich, empirically-based assessment of ways that Turkey exercised trade policy flexibilities during the global economic crisis of 2008-11. First, and despite multilateral and customs union commitments that might limit changes to applied tariffs, Turkey made changes to both its applied Most Favored Nation and preferential tariffs that cumulatively affect nearly 9 percent of manufacturing imports and 10 percent of import product lines. Second, Turkeyapos;s cumulative application of temporary trade barrier (TTB) policies -- antidumping, safeguards and countervailing duties -- are estimated to impact by 2011 an additional 4 percent of imports and 6 percent of product lines. Other surprising results on Turkeyapos;s use of flexibilities include: extending the duration of previously imposed antidumping and safeguards beyond expected removal dates, removing one TTB policy over a set of products and immediately reapplying a different TTB policy, covering lengthy upstream and downstream segments of important industries, and deepening discriminatory preference margins already inherent in existing preferential trade agreements. See Less -
Policy Research Working Paper WPS6322 JAN 01, 2013
Bown, Chad P.
While the original justification of the antidumping laws in the industrial economies was to protect domestic consumers against predation by foreign suppliers, by the early 1990s the laws and their use had evolved so much that the opposite concern arose. ... See More + Rather than attacking anti-competitive behavior, dumping complaints by domestic firms were being used to facilitate collusion among suppliers and enforce cartel arrangements. This paper examines the predation and anti-competitiveness issues from the perspective of the quot;new usersquot; of antidumping -- the major emerging economies for which antidumping is now a major tool in the trade policy arsenal. The paper examines these concerns in light of important ways in which the world economy and international trading system have been changing since the early 1990s, including more firms and more countries participating in international trade, but also more extensive links among suppliers and consumers through multinational firm activity and vertical specialization. See Less -
Policy Research Working Paper WPS6197 SEP 01, 2012
Bown, Chad P.; McCulloch, Rachel
Do exports resume when import-restricting temporary trade barriers such as antidumping are finally removed? To establish the importance of this question for emerging economies, this paper uses newly available data from the World Bankapos;s Temporary Trade Barriers Database to update a number of inter-temporal indicators of import protection along three dimensions: additional time coverage through 2011, additional policy-imposing country coverage, and a more comprehensive depiction of impacted trading partner coverage. ... See More + It then turns to the emerging economy exporters affected by temporary trade barriers and highlights the economic significance of frequently bilateral import restrictions imposed by other emerging economies, i.e., South-South protectionism. Finally, it then investigates empirically whether country-level exports resume when the previously imposed -- but temporary -- import protection is finally removed. Chinaapos;s exporters respond quickly and aggressively to the market access opening embodied in the removal of such import restrictions. This differs markedly from the slow and tepid export response of other emerging economies, especially when the import protection had been imposed by another emerging economy trading partner. This evidence suggests a previously unidentified long-run cost associated with such South-South protectionism that merits further research and inquiry. See Less -
Policy Research Working Paper WPS6162 AUG 01, 2012
Bown, Chad P.
This research estimates the impact of macroeconomic fluctuations on import protection policies over 1988:Q1-2010:Q4 for five industrialized economies -- the United States, European Union, Australia, Canada and South Korea. ... See More + There is evidence of a strong countercyclical trade policy response in the pre-Great Recession period of 1988:Q1-2008:Q3 during which increases in domestic unemployment rates, real appreciations in bilateral exchange rates, and declines in the GDP growth rates of bilateral trading partners led to substantial increases in new temporary trade barriers. It then applies this pre-Great Recession empirical model to realized macroeconomic data from 2008:Q4-2010:Q4 and find it predicts a surge of new import protection during the Great Recession -- e.g., for the US and EU, the model predicts new trade barriers would cover an additional 15 percentage points of nonoil imports, well above the baseline level of 2-3 percent of import coverage immediately preceding the crisis. Finally, the research examines why the realized trade policy response differed from model predictions. While exchange rate movements played an important role in limiting new import protection during the Great Recession, there is also evidence of one particularly important change in trade policy responsiveness; i.e., in this period, governments refrained from imposing new temporary trade barriers against foreign trading partners experiencing their own weak or negative economic growth. See Less -
Policy Research Working Paper WPS6038 APR 01, 2012
Bown, Chad P.; Crowley, Meredith A.
In poor countries, most governments implement policies aiming to stabilize the prices of staple foods, which often include storage and trade measures insulating their domestic market from the world market. ... See More + It is of crucial importance to understand the precise motivations and efficiency of those interventions, because they can have consequences worldwide. This paper addresses those issues by analyzing the case of a small, open developing country confronted by shocks to both the crop yield and foreign price. In this model, government interventions may be justified by the lack of an insurance market for food prices. Considering this market imperfection, the authors design optimal public interventions through trade and storage policies. They show that an optimal trade policy largely consists of subsidizing imports and taxing exports, which benefits consumers at the expense of producers. Import subsidies alleviate the non-negativity of food storage. In other words, when stocks are exhausted, subsidizing imports prevents domestic price spikes. One striking result: an optimal storage policy on its own is detrimental to consumers, since its stabilizing benefits leak into the world market and it raises the average domestic price. By contrast, an optimal combination of storage and trade policies results in a powerful stabilizing effect for domestic food prices. See Less -
Policy Research Working Paper WPS5943 JAN 01, 2012
Gouel, Christophe; Jean, Sebastien
Traditional weighted-average measures of trade distortions are widely used in analyzing global and regional reforms, despite well-known deficiencies. ... See More + This paper develops and applies optimal aggregators for the real-world case of multiple countries and commodities with much more detailed information on trade than on production and consumption. The approach reflects the fact that different aggregators are needed for expenditure on imported goods and for tariff revenues, and allows for incorporation of both intensive and extensive margins of adjustment to reform. Applications confirm that the technique is straightforward enough for widespread use, and point to close to a doubling of the welfare gains at the intensive margin when using the highest possible level of international commodity disaggregation, with larger gains in developing regions than in the industrial countries. The measured income gains increase along the entire path of liberalization, with slightly larger increases in the earlier stages, where the gaps between the responses of the expenditure and tariff revenue aggregators are largest. Sensitivity analysis suggests that, for global trade reform, the ease of substitution between tariff lines is much more important than that between varieties from different countries. See Less -
Policy Research Working Paper WPS5665 MAY 01, 2011
Laborde, David; Martin, Will; van der Mensbrugghe, Dominique
The United States use of quot;zeroingquot; in its antidumping procedures has become a political flash point threatening some legitimacy of the WTOapos;s dispute settlement system. ... See More + This paper provides a positive analysis of the zeroing issue, explains how it has evolved and who is likely to be affected by it. The authors use economic theory to identify how export price volatility accentuates the impact of zeroing on the size of U.S. antidumping tariffs and review the WTO caseload over zeroing. They describe the impact that the U.S.apos;s retrospective system for assessing antidumping margins has on zeroing and the political economy implications as the U.S. struggles to generate policy reform. The authors survey existing evidence of the impact of the zeroing on dumping margins and contribute their own evidence to suggest that zeroing is just as likely to impact the size of U.S. antidumping duties applied on developing country exports as developed economy exports. Thus while developed economies have filed the vast majority of WTO disputes against the U.S. over zeroing, the authors conclude that zeroing is also likely a relevant issue for developing country exporters as over 60 percent of the product lines currently subject to U.S. antidumping are exported by developing countries. See Less -
Policy Research Working Paper WPS5352 JUN 01, 2010
Bown, Chad P.; Prusa, Thomas J.
Is there evidence from Chinaapos;s pre-WTO accession period that newly imposed U.S. or EU import restrictions deflect Chinese exports to third markets? ... See More + The authors examine this question by drawing on a newly constructed data set of U.S. and EU product-level import restrictions on Chinese trade imposed between 1992 and 2001 and estimate their impact on Chinese exports to 38 alternative markets. There is no systematic evidence that the import restrictions imposed during this period resulted in Chinese exports surging to such alternate destinations. To the contrary, there is weak evidence of a chilling effect on Chinaapos;s exports to third markets. See Less -
Policy Research Working Paper WPS5291 MAY 01, 2010
Bown, Chad P.; Crowley, Meredith A.
This paper examines the role of the public sector in providing additional information to exporters in developing countries as they seek to monitor and keep open their access to foreign markets by using the rules of the WTO system. ... See More + It highlights new information generation and dissemination initiatives undertaken by the WTO Secretariat, Global Trade Alert, and the World Bank in response to the global economic crisis of 2008-2009. Given trends in the imposition of new crisis-era trade barriers that these initiatives have identified, the paper describes ways in which the new sources of rich and detailed data may be used to further assist developing country exporters that may lack the capacity to sufficiently monitor their trading interests by relying solely on private resources. See Less -
Policy Research Working Paper WPS5301 MAY 01, 2010
Bown, Chad P.
The Bagwell and Staiger (1990) theory of cooperative trade agreements predicts new tariffs (i) increase with imports, (ii) increase with the inverse of the sum of the import demand and export supply elasticities, and (iii) decrease with the variance of imports. ... See More + The authors find US import policy during 1997-2006 to be consistent with this theory. A one standard deviation increase in import growth, the inverse of the sum of the import demand and export supply elasticity, and the standard deviation of import growth changes the probability that the US imposes an antidumping tariff by 35 percent, by 88 percent, and by -76 percent, respectively. See Less -
Policy Research Working Paper WPS5223 MAR 01, 2010
Bown, Chad P.; Crowley, Meredith A.
Many trade negotiations involve large cuts in high tariffs, with flexibilities allowing much smaller cuts for an agreed number of politically-sensitive products. ... See More + The effects of these flexibilities on market access opportunities are difficult to predict, creating particular problems for developing countries in assessing whether to support a proposed agreement. Some widely-used ad hoc approaches to identifying likely sensitive products -- such as the highest-bound-tariff rule -- suggest that the impacts of a limited number of such exceptions on average tariffs and on market access are likely to be minor. This paper uses a rigorous specification based on the apparent objectives of policy makers in setting the pre-negotiation tariff. Applying this approach with detailed data allows the authors to assess the implications of sensitive-product provisions for average agricultural tariffs, economic welfare, and market access under the Doha negotiations. The authors conclude that highest-tariff rules are likely to seriously underestimate the impacts on average tariffs, and that treating even 2 percent of tariff lines as sensitive is likely to have a sharply adverse impact on economic welfare. The impacts on market access are also adverse, but much smaller, perhaps reflecting the mercantilist focus of the negotiating process. See Less -
Policy Research Working Paper WPS5200 FEB 01, 2010
Jean, Sebastien; Laborde, David; Martin, Will
Critical appraisals of the current and potential benefits from developing country engagement in the World Trade Organization (WTO) focus mainly on the Doha Round of negotiations. ... See More + This paper examines developing country participation in the WTO dispute settlement system to enforce foreign market access rights already negotiated in earlier multilateral rounds. The dispute data from 1995 through 2008 reveal three notable trends: developing countries sustained rate of self-enforcement actions despite declining use of the Dispute Settlement Understanding (DSU) by developed countries, developing countries increased use of the DSU to self-enforce their access to the markets of developing as well as developed country markets, and the prevalence of disputes targeting highly observable causes of lost foreign market access, such as antidumping, countervailing duties, and safeguards. The paper also examines potential impacts of the Advisory Centre on WTO Law (ACWL) into the WTO system in 2001. A close look at the data reveals evidence on at least three channels through which the ACWL may be enhancing developing countriesapos; ability to self-enforce foreign market access: increased initiation of sole-complainant cases, more extensive pursuit of the DSU legal process for any given case, and initiation of disputes over smaller values of lost trade. See Less -
Policy Research Working Paper WPS5168 JAN 01, 2010
Bown, Chad P.; McCulloch, Rachel
|Title||Document Date||Report No.||Document Type||Also available in|
|Trade flows and trade disputes (English) See More +||JUL 01, 2014||WPS6979||Policy Research Working Paper|
|What do we know about preferential trade agreements and temporary trade barriers ? (English) See More +||JUN 01, 2014||WPS6898||Policy Research Working Paper|
|Trade policy instruments over time (English) See More +||JAN 01, 2014||WPS6757||Policy Research Working Paper|
|How different are safeguards from antidumping ? evidence from us trade policies toward steel (English) See More +||MAR 01, 2013||WPS6378||Policy Research Working Paper|
|Emerging economies, trade policy, and macroeconomic shocks (English) See More +||JAN 01, 2013||WPS6315||Policy Research Working Paper|
|Trade policy flexibilities and Turkey : tariffs, antidumping, safeguards, and WTO dispute settlement (English) See More +||JAN 01, 2013||WPS6322||Policy Research Working Paper|
|Antidumping and market competition: implications for emerging economies (English) See More +||SEP 01, 2012||WPS6197||Policy Research Working Paper|
|Emerging economies and the emergence of south-south protectionism (English) See More +||AUG 01, 2012||WPS6162||Policy Research Working Paper|
|Import protection, business cycles, and exchange rates : evidence from the great recession (English) See More +||APR 01, 2012||WPS6038||Policy Research Working Paper|
|Optimal food price stabilization in a small open developing country (English) See More +||JAN 01, 2012||WPS5943||Policy Research Working Paper|
|Measuring the impacts of global trade reform with optimal aggregators of distortions (English) See More +||MAY 01, 2011||WPS5665||Policy Research Working Paper|
|U.S. antidumping: much ado about zeroing (English) See More +||JUN 01, 2010||WPS5352||Policy Research Working Paper|
|Chinaapos;s export growth and the China safeguard : threats to the world trading system ? (English) See More +||MAY 01, 2010||WPS5291||Policy Research Working Paper|
|Developing countries and monitoring WTO commitments in response to the global economic crisis (English) See More +||MAY 01, 2010||WPS5301||Policy Research Working Paper|
|Self-enforcing trade agreements : evidence from time-varying trade policy (English) See More +||MAR 01, 2010||WPS5223||Policy Research Working Paper|
|Formulas and flexibility in trade negotiations : sensitive agricultural products in the WTOapos;s Doha agenda (English) See More +||FEB 01, 2010||WPS5200||Policy Research Working Paper|
|Developing countries, dispute settlement, and the advisory centre on WTO law (English) See More +||JAN 01, 2010||WPS5168||Policy Research Working Paper|