Why the WTO? An Introduction to the Economics of Trade Agreements

Grossman, Gene M.; Horn, Henrik

doi:10.1017/cbo9781139839105.004

Cited by 25 publications

(6 citation statements)

References 42 publications

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“…The hypotheses of interest are that β < 0 and β U > 0, though I will conservatively present p-values based on two-sided tests. 34 A key challenge in the estimation of this specification is to define input-output relationships between products. I use two different measures of upstream taxes and tariffs.…”

Section: Export Restrictions and Exportsmentioning

confidence: 99%

“…Also, because the end of the Multifiber Arrangement presumably had a significant impact on textiles and apparel exports during this period, I additionally drop all products in section 11 of the HS product classification (which covers textiles and apparel). After these adjustments, twelve HS sections (out of a total of 21) are represented in the sample 34. Note also that because the left-hand-side variable is the logarithm of export value, observations with zero trade flows are dropped, and so the coefficients should be interpreted as pertaining to the intensive margin of trade.…”

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confidence: 99%

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The persistence of trade policy in China after WTO accession

Garred

2018

Journal of International Economics

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Import tariffs have fallen steeply worldwide over the last several decades, but has trade policy persisted through a rise in the use of other instruments? I study this question in the context of China's 2001 accession to the World Trade Organization, using panel data on Chinese export policies. I find that after its entry into WTO, the distribution of China's export restrictions across industries increasingly resembles the inverse of its pre-WTO import tariff schedule. The evidence suggests that increases in export restrictions are likely to have partly restored China's pre-WTO pattern of industrial protection.

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Section: Export Restrictions and Exportsmentioning

confidence: 99%

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confidence: 99%

The persistence of trade policy in China after WTO accession

Garred

2018

Journal of International Economics

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“…29 Bagwell and Staiger (2002: 63). 30 Grossman and Horn (2012). I shall criticize one aspect of the paper.…”

Section: Does the Standard Model Allow Agreements That Reduce Protectmentioning

confidence: 99%

Explaining Trade Agreements: The Practitioners' Story and the Standard Model

Regan

2014

World Trade Review

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There are two widely accepted explanations of why politically motivated governments make trade agreements. There is an informal explanation, which I shall call the 'practitioners' story', even though it is most economists' informal view as well. And there is a formal explanation in the economics literature, which I shall call the 'standard model', referring to the basic structure shared by the Bagwell-Staiger and Grossman-Helpman models. Unfortunately, the practitioners' story and the standard model contradict each other at every crucial point. For example, in the practitioners' story, trade agreements are about reducing politically motivated protectionism; and getting an agreement depends on political support from exporters. But in the standard model, trade agreements never reduce such protectionism; and politics plays no role in securing an agreement. This paper expounds the contradictions between the practitioners' story and the standard model, which have gone largely unremarked. It refutes suggestions by defenders of the standard model that the contradictions are illusory. It identifies the different assumptions made by the two explanations that generate the contradictions. It gives reasons for skepticism about the standard model. And it discusses why all of this matters.

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“…The existence of such a thing is a deep problem of pure welfare economics, but it is conventional in economics and the application of economics to law to assume that such a thing can be attributed to something we will call "the state" (see e.g. Grossman and Horn 2013). never whether, or not, these are "good objectives".…”

Section: Iii1 Subsidies In the Theory Of Economic Policymentioning

confidence: 99%

Nihil novi sub sole:The Need for Rethinking WTO and Green Subsidies in Light ofUnited States – Renewable Energy

Nelson

Puccio

2021

World Trade Review

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US–Renewable Energy is the last in a series of WTO disputes involving subsidies schemes with local content requirements. Local content requirements (LCRs) are highly discriminatory and trade distortive instruments and therefore all cases concerning green energy have been found to violate WTO law. However, recent jurisprudence has developed a different definition of prohibited LCRs under the GATT and the SCM agreement, the latter allowing for some leeway to define origin of products under a government subsidy scheme. Depending how the subsidy scheme is framed, it will be able to be excused from the GATT's more stringent prohibition of LCRs, this raises question of consistency in the application of the LCRs prohibition. Moreover, we review a simple and robust approach that modern welfare economics suggests for framing discussions of subsidy policy. We apply this approach to the case of renewable energy subsidies and discuss some complexities with respect to local content requirements. In conclusion, this allows us to critically assess and review proposals to increase coherence between WTO subsidy policy and green energy promotion policies and submit proposals to achieve better suited WTO subsidy rules.

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Why the WTO? An Introduction to the Economics of Trade Agreements

Cited by 25 publications

References 42 publications

The persistence of trade policy in China after WTO accession

The persistence of trade policy in China after WTO accession

Explaining Trade Agreements: The Practitioners' Story and the Standard Model

Nihil novi sub sole:The Need for Rethinking WTO and Green Subsidies in Light ofUnited States – Renewable Energy

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