On the Role of Retaliation in Trade Agreements

Martín, Alberto; Vergote, Wouter

doi:10.2139/ssrn.1001858

Cited by 15 publications

(11 citation statements)

References 32 publications

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“…With this, there is an incentive to substitute tariffs with AD measures. Since tariffs are bound through the mutual agreement between member countries, the use of NTMs—such as AD—is then triggered (Martin and Vergote, ).…”

Section: A Simple Modelmentioning

confidence: 99%

False friends? Empirical evidence on trade policy substitution in regional trade agreements

Silberberger

Stender

2018

World Economy

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In this paper, we examine the interplay of regional economic integration and the use of bilateral antidumping (AD) measures. Our empirical analysis brings three central findings to light: (i) we find that regional trade agreements (RTAs) generally reduce the likelihood of AD activity among integration partners; (ii) in addition, an improvement in the tariff treatment between trading partners—regardless of whether expressed as the directly faced tariff or as a tariff margin—generally leads to a lower likelihood of bilateral AD and (iii) regarding the interaction of both events, however, a reciprocally higher tariff margin between integration partners leads to a higher likelihood of bilateral AD than an equal tariff margin among non‐integration trading partners. The latter effect seems to be primarily driven by those RTAs with a participation of “South” countries.

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Section: A Simple Modelmentioning

confidence: 99%

False friends? Empirical evidence on trade policy substitution in regional trade agreements

Silberberger

Stender

2018

World Economy

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“…13 Martin and Vergote (2008) do consider antidumping, however, in their paper it arises from private political pressure and the desire to temporarily renegotiate the agreement as allowed for in Article XXVIII. In this paper, we are more concerned with abuse of Article VI that arises from imperfect rather than incomplete information.…”

Section: A the Basic Setupmentioning

confidence: 99%

Trade disputes, quality choice, and economic integration

Chisik

2012

Journal of International Economics

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Recent work demonstrates the importance of developing high quality output in order to compete in export markets and other recent studies verify the prevalence of fixed and ongoing trade costs while participating in those markets. I consider the joint choice of quality and export promotion costs when trade relationships are subject to temporary disputes. When transparency is low and macroeconomic instability is high, disputes arrive more frequently and, therefore, firms may inefficiently choose lower levels of quality and export promotion. These, in turn, build shallower trading relationships with less trade volumes and higher tariffs, and generate greater trade reductions during the more common trade disputes. Several institutional features of the WTO dispute settlement mechanism that are generally lacking in preferential trade agreements such as improved transparency, dispute investigation, and the provision to recommend asymmetric continuation payoffs can ameliorate these inefficient quality choice outcomes. Hence, lower quality output and lower quality trading relationships may be more endemic to countries that depend on preferential trading areas as opposed to the WTO. JEL Classification: F13, F15, C73, K33.

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“…30 30 The vector z(β) is detailed in the proof of Proposition 1 in the Appendix. Note that the assumption µ > Lemma 4.…”

Section: Contractual Rangementioning

confidence: 99%

Optimal collusion with internal contracting

Lee

2010

Games and Economic Behavior

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In this paper, we develop a model of collusion in which two firms play an infinitelyrepeated Bertrand game when each firm has a privately-informed agent. The colluding firms, fixing prices, allocate market shares based on the agent's information as to cost types. We emphasize that the presence of privately-informed agents may provide firms with a strategic opportunity to exploit an interaction between internal contracting and market-sharing arrangement: the contracts with agents may be used to induce firms' truthful communication in their collusion, and collusive market-share allocation may act to reduce the agents' information rents.Journal of Literature Classification numbers: C73, L13, L14.

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On the Role of Retaliation in Trade Agreements

Cited by 15 publications

References 32 publications

False friends? Empirical evidence on trade policy substitution in regional trade agreements

False friends? Empirical evidence on trade policy substitution in regional trade agreements

Trade disputes, quality choice, and economic integration

Optimal collusion with internal contracting

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