Date: 2019
Type: Article
Trade policy substitution : theory and evidence
Review of world economics, 2019, Vol. 155, No. 4, pp. 755-783
BEVERELLI, Cosimo, BOFFA, Mauro, KECK, Alexander, Trade policy substitution : theory and evidence, Review of world economics, 2019, Vol. 155, No. 4, pp. 755-783
- https://hdl.handle.net/1814/60909
Retrieved from Cadmus, EUI Research Repository
With the help of a political economy model, we show that the extent of ‘trade policy substitution’—namely, substitution of tariffs with non-tariff measures (NTMs)—depends on the cost differential between domestic and foreign firms in complying with product standards. The model suggests the prevalence of trade policy substitution in developed economies, where the costs of compliance are relatively low. We test and validate this prediction using a database on NTMs that identifies actual trade restrictions. We further examine the possible protectionist use of trade policy substitution exploiting information on the end of the Multifibre Arrangement (MFA) and on WTO notifications.
Additional information:
First Online: 02 February 2019
Cadmus permanent link: https://hdl.handle.net/1814/60909
Full-text via DOI: 10.1007/s10290-018-00338-7
ISSN: 1610-2878; 1610-2886
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