Global Supply Chains and Trade Policy

Blanchard, Emily J.; Bown, Chad P.; Johnson, Robert C.

Global Supply Chains and Trade Policy

2016

Blanchard, Emily J. | Bown, Chad P. | Johnson, Robert C.

How do global supply chain linkages modify countries' incentives to impose import protection? Are these linkages empirically important determinants of trade policy? To address these questions, this paper introduces supply chain linkages into a workhorse terms-of-trade model of trade policy with political economy. Theory predicts that discretionary final goods tariffs will be decreasing in the domestic content of foreign-produced final goods. Provided foreign political interests are not too strong, final goods tariffs will also be decreasing in the foreign content of domestically-produced final goods. The paper tests these predictions using newly assembled data on bilateral applied tariffs, temporary trade barriers, and value-added contents for 14 major economies over the 1995-2009 period. There is strong support for the empirical predictions of the model. The results imply that global supply chains matter for trade policy, both in principle and in practice.

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Mots clés AGROVOC

agriculture arbitrage bilateral agreements consumers consumption customs unions development economics domestic production dumping econometrics economic policies elasticity equilibrium export subsidies exports foreign investment free trade free trade agreements human capital incentives income inputs international trade market access measurement national income prices production rent supply tariffs taxes terms of trade trade trade agreements trade barriers trade liberalization trade negotiations trade preferences trade protection trends value added welfare world trade organization wto

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D'autres materias

Economic policy; Constant returns to scale; Economic theory; Outcomes; Economy; Foreign direct investment; Worker rights; Capital goods; Formal analysis; Utility function; Payments; Access; Apparel; Input trade; Preferential market access; Bilateral imports; Trade patterns; Trade policy; World prices; Bilateral trade data; Trade policy instruments; Preferential trade; Import penetration; Trade flows; Absolute value; Safeguard measures; Exporters; Utility; Reciprocity; Input-output tables; Applied tariff; Goods; Regionalism; Import protection; Variables; Development policy; Uruguay round; Import quantities; End use; Domestic producers; Foreign investors; Factors of production; Antidumping; Endogenous variables; Gravity variables; Intermediate inputs; Regional trade agreements; Foreign goods; Export supply; Bilateral trade; Consumer surplus; Export shares; Trade data; Import barriers; Tariff; Value; Trade diversion; Preferential access; Trade agreement; Trade costs; Preferential trade agreements; Political economy; Free trade areas; Foreign producers; Returns to scale; Primary factors; Gdp; Base year; Apparel industry; Gross output; Multilateral trade liberalization; Trade externalities; Generalized system of preferences; Preferential agreement; Regional trade; Theory; Revenue; Externality; Export taxes; Domestic industry; Gross exports; Benchmark; Trade motives; Multilateral trade; Foreign suppliers; World trade; Concessions; Domestic suppliers; Externalities; Foreign production; International trade policy; Preferential treatment; Quantitative restrictions; Final goods; Trade partners; Nash equilibrium

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anglais

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http://hdl.handle.net/10986/23702

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Global Supply Chains and Trade Policy

2016

Mots clés AGROVOC

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