Race‐to‐the‐bottom Tariff Cutting

Vézina, Pierre‐Louis

doi:10.1111/roie.12135

Cited by 5 publications

(4 citation statements)

References 48 publications

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“…In Blanchard (), tariff reductions spur export‐oriented foreign direct investment (FDI) and a cause a cycle of liberalization. Vezina () provides some empirical evidence for “Factory Asia countries” that is also consistent with this theoretical framework.…”

supporting

confidence: 60%

The “Emulator Effect” of the Uruguay Round on US Regionalism

Fugazza¹,

Robert‐Nicoud

2014

Rev International Economics

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Using a detailed data set at the tariff line level, we find an emulator effect of multilateralism on subsequent regional trade agreements involving the US. We exploit the variation in the frequency with which the US has granted immediate duty free access (IDA) to its Free Trade Area partners across tariff lines. A key finding is that the US has granted IDA status especially on goods for which it had cut the multilateral MFN tariff during the Uruguay round the most. Thus, the Uruguay Round (multilateral) 'concessions' have emulated subsequent (preferential) trade liberalisation. We conclude from this that past liberalisation sows the seeds of future liberalisation and that multilateral and preferential trade agreements are dynamic complements.

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supporting

confidence: 60%

The “Emulator Effect” of the Uruguay Round on US Regionalism

Fugazza¹,

Robert‐Nicoud

2014

Rev International Economics

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“…He suggested that decades of unilateral tariff cutting (in order to obtain marginal locational advantages) in emerging economies of Asia have been induced, at least in part, by a competition aimed to attract FDI from Japan. Using spatial econometrics, the author showed that tariffs on parts and components, which could be considered as a crucial locational determinant for Japanese firms, followed those of competing economies if the latter were lower, if the motivation to obtain FDI was high, and when competing countries had the similar level of development [10].…”

Section: Issn 2412-8872mentioning

confidence: 99%

Race to the Bottom in International Tax Competition: Some Conceptual Issues

Sokolovska¹

2016

JTR

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The purpose of the article is to provide analysis of conceptual background of the international tax competition, and its negative externality-the race to the bottom situation. We distinguished the three types of tax competition models, notably, traditional, asymmetric and Leviathan models. Also we analyzed briefly the main benefits and disadvantages of international tax competition in the modern world. Using both comparative and graphical analysis we provide a brief evaluation of the dynamics of statutory corporate income tax rates in countries worldwide. For the purpose of such analysis we distinguished the four regions: Europe, Latin America, Africa and countries of the former USSR. We used panel data on statutory corporate income tax rates for 70 countries for the period of 2006-2015. We found that in the three regions, notably Europe, Latin America and countries of the former USSR there were no significant changes in statutory corporate income tax rates while in African countries they have changed substantially. This can be explained by the weakness of these tax systems, i.e. the countries compete with each other, primarily by reducing statutory tax rates. But in order to make some conclusions both about taxation of corporate income and possibility of the race-to-bottom situation occurrence in neighboring countries, the real tax rates, taking into account the tax incentives and eliminations should be considered in future research. The obtained results could be useful for the elaboration of guidelines in order to create an attractive investment climate both for domestic and non-resident investors. KEYWORDS. International taxation; tax competition; investment; corporate income tax; race to the bottom; crosscountry analysis. Е. В. Соколовская НИИ фискальной политики Государственной налоговой службы Украины, г. Киев, Украина «ГОНКА УСТУПОК» В МЕЖДУНАРОДНОЙ НАЛОГОВОЙ КОНКУРЕНЦИИ АННОТАЦИЯ. Цель статьи заключается в рассмотрении концептуальных положений международной налоговой конкуренции и негативной экстерналии этого явления-«гонки уступок». Определено три типа моделей налоговой конкуренции, в частности, традиционные, ассиметричные и модели Левиафана. Также представлен краткий анализ основных преимуществ и недостатков международной налоговой конкуренции в современных условиях. Используя методы сравнительного и графического анализа, представлена краткая оценка динамики номинальных ставок налога на доход корпораций в странах мира. Для целей анализа было выделено четыре региона: Европа, Латинская Америка, Африка и страны бывшего СССР и использованы данные по 70 странам мира за период 2006-2015 гг. Анализ показал, что в трех регионах мира (Европа, Латинская Америка и страны бывшего СССР) значительных изменений номинальных ставок налога на доход корпораций не происходило, тогда как в стра-Административно-управленческие проблемы налоговых реформ Administrative and managerial issues of tax reforms

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“…After all, this kind of unilateral action had accounted for more than two thirds of all trade liberalisation by developing countries in the two decades leading up to 2003 (World Bank 2005). There is also a host of other evidence, 6 including that of Vézina (2010), which shows that it was unilateral actions that played an overwhelming role in the trade liberalisation of the original ASEAN members, and in drawing in foreign direct investment to these countries to supplant the regional supply chain. In this way, the rise in regionalism may eventually be the most compelling factor in contributing to its own demise by revitalising multilateralisation, if not the multilateral system.…”

Section: The Way Forwardmentioning

confidence: 99%

From Spaghetti Bowl to Jigsaw Puzzle? Fixing the Mess in Regional and Global Trade

Menon¹

2014

Asia & Pacific Policy Stud

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The rise of mega-regionals such as the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) suggests that the world trade system is fragmenting and appears more like a jigsaw puzzle than a spaghetti bowl. There are both regional and global jigsaw puzzles to be solved-in that order-to clean up the world trade system. But is this even likely? The difficulties of free trade agreement (FTAA) consolidation at the regional level are well known, while piecing together the blocs around the world to form a coherent whole is even more challenging. In this context, a way forward is to return to the most widely used modality of trade liberalisation-unilateral actions-but this time involving the multilateralisation of preferences rather than unreciprocated reductions in tariff rates. Multilateralisation of preferences presents a practical way forward in addressing the disarray in the world trade system.

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Race‐to‐the‐bottom Tariff Cutting

Cited by 5 publications

References 48 publications

The “Emulator Effect” of the Uruguay Round on US Regionalism

The “Emulator Effect” of the Uruguay Round on US Regionalism

Race to the Bottom in International Tax Competition: Some Conceptual Issues

From Spaghetti Bowl to Jigsaw Puzzle? Fixing the Mess in Regional and Global Trade

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