Protectionism: An analysis from project LINK

The LINK system of world trade is used to examine present tendencies toward protectionism. In protectionist scenarios we increase the prices of manufactured imports into 13 LINK-OECD countries by 5, 10, and 20 percent respectively, for 1978–1979. If a country's import equations do not depend significantly on relative price, we impose corresponding quantitative import restrictions of 5, 10, and 20 percent. Smaller OECD countries, developing countries, and socialist countries are assumed to be nonprotectionist in these scenarios. The discrepancies between the values of leading variables in the protectionist scenarios and in a baseline case show the effects of the different degrees of protectionism assumed. The results describe and validate Adam Smith's principles of the gains from free trade.     

MFN tariff treatment of imports from China: Effects on U.S. employment

This article estimates the effects on U.S. output and employment of granting most-favored-nation (MFN) tariff treatment to imports from the People's Republic of China (PRC). Import demand elasticities are used to estimate changes in imports resulting from the lower tariff rates. A highly disaggregated U.S. input-output table and labor-output ratios are used to convert changes in imports into changes in domestic output and employment at a detailed sectorial level. U.S. import restraints on the textile and apparel industry are incorporated into the analysis. The article explores the implications of increased imports from the PRC for U.S., PRC, and LDC policy makers.     

Are Subsidies to be Blamed? A Reexamination of U.S. Countervailing Duty on Hog Imports From Canada

A dramatic increase in U.S. hog imports from Canada triggered a successful countervail action against Canada in 1985, and resulted in an import tariff. This paper finds Canadian subsidies were not a major factor explaining increased hog exports, rather, the depreciation of the Canadian dollar played a larger role. More importantly, we find that hog imports from Canada did not “injure” the U.S. industry. These results imply the U.S. hog countervail duty was the outcome of rent-seeking activities rather than due to economic factors.     

《日美半导体协议》冲击下的日本半导体产业发展研究——基于日本高科技企业经营业绩的分析

自20世纪70年代末,在"本政府的支持下,"本半导体产业实现跨越式发展,进而引发"美间的半导体摩擦。美国采取限制进口、阻碍"本引入先进技术等措施抑制"本半导体产业发展,"美两国还于1986年签订了《"美半导体协议》。通过分析"本高科技企业经营业绩的微观数据发现:《"美半导体协议》在短期内对"本半导体企业的营业收入、净利润及净资产收益率等企业竞争力指标产生了负面影响;"本半导体企业通过调整生产经营方式、合理布局产业链、调整经营结构、加强自主创新等方式,在中期内一定程度改善了企业的生产经营状况,但"本半导体产业的持续发展受到阻碍。在中美经贸摩擦严峻的背景下,中国的高科技企业或可从中获得启示。     

The impact of the Soviet Union upon the U.S. feed/livestock sector— An assessment

In this article, the impact of volatile Soviet Union corn imports on the U.S. feed/livestock sector is analyzed using an econometric model. The model's attention to supply response when feed price changes enables it to determine the nature of the effect of exogenous shocks across feed and livestock sectors. The model is used in historical simulation to demonstrate the effects of actual and alternative paths of variable Soviet import demand and to explore the difficulties of deriving a stabilizatior policy for these linked sectors.     

Modeling manufactured imports: Methodological issues with evidence from Australia

This paper investigates the relationship between manufactured import flow to Australia, and relative prices and domestic economic activity net of cyclical demand effects over the period 1981Q3 to 1991Q2. This is done through the estimation of import demand functions for total manufactured imports and nine major import categories using the general-to-specific modeling approach. We find that the homotheticity assumption on activity elasticity is met in most cases. The price elasticity estimates for individual categories range from 0.32 to 2.1, with a weighted average of 0.52. We also find some evidence of upward bias in price elasticity estimates when an aggregate import function is employed in a context where a significant portion of imports are subject to quantitative restrictions (QRs).     

Policy Simulation of the Indian Silk Industry through an Econometric Model

This study aimed at understanding and quantifying the relationship between the important variables of the various subsectors of the Indian silk industry through an econometric simulation model, and using the model for forecasting as well as policy simulations. Forecasts of the endogenous variables of the system (demand, supply, and prices of mulberry cocoons, raw silk, and silk fabric) for the period 1991–92 to 2000–01 indicates that the growth in the industry will slow down in the future. Policy simulations were undertaken to assess the changes in the import price of raw silk, export price of fabrics, and regulation of the quantity of imports of raw silk on the silk industry. While imports and exports were closely linked, their impact on the silk industry was not very high. It was also revealed that the income of the consumers and mulberry acreage have significant influence on the industry.     

The impact of avian influenza on the Korean egg market: Who benefited?

The historical decomposition and directed acyclic graph methods are employed to estimate the effect of avian influenza in Korea on egg price transmission between the farm, wholesale, and retail levels. Our findings suggest that farm and retail egg prices are connected by the wholesale price. We also find that the farm-wholesale and the wholesale-retail margins increase during the avian influenza period. Our results imply that the retailer and wholesaler use their market power to increase their price during the food safety crisis. Therefore, the Korean government should control market power by allowing more emergency egg imports.     

Trade liberalization and factor prices: An application to the U.S. manufacturing sector

The effects of a trade policy on the prices of productive factors have important policy implications, particularly with regard to trade liberalization and protection. This paper examines the empirical evidence of the Stolper-Samuelson theorem for 16 major U.S. manufacturing industries. The theorem asserts that international trade reduces the prices of scarce productive factors and hence decreases their shares of income. The elasticities of prices of finished goods with respect to factor prices are estimated and then rearranged in the form of the row stochastic P-matrix in accordance with the proposition of Uekawa. The inverse of this matrix seems to confirm the weak version of the Stolper-Samuelson theorem.     

日美贸易失衡与中美贸易失衡的对比分析——以产业冲击为视角

中美贸易失衡是继日美贸易失衡后美国在经贸领域的又一关注焦点,美国将中美贸易失衡与“产业冲击”相挂钩。通过从汽车和半导体产业入手,对日美贸易失衡中的产业冲击问题进行分析发现:在中美贸易和日美贸易的发展过程中,由于产业发展阶段、对外直接投资对产业的影响、贸易对就业的冲击、产业竞争与互补程度以及出口管制程度等方面存在不同,日美贸易失衡对美国产业构成了实质性冲击,与中美贸易失衡在该问题上的影响存在本质差异。美国以贸易失衡和“产业冲击”责难中国,并借此发动贸易战,是美国意识形态方面的固有偏见和遏制中国发展的托词,中国需要在谋划中美磋商和反制的策略、推动中国产业结构升级及提防美国发动金融战等方面进行政策应对。     

Short run responses to foreign exchange crises

This paper constructs a short-run general equilibrium model for an LDC-type economy. Some key features are the possibility of excess capacity and the presence of quantitative restrictions on exports and imports. A rich variety of pricing possibilities for tradeable goods is allowed for, including “water in the tariff” as well as domestic prices exceeding world prices with binding import quotas.The model is used to analyze alternative responses to a foreign-exchange crisis. Import controls, devaluation and cuts in government expenditures are compared. We find that: i) import quotas can worsen the balance of trade, ii) rationing foreign exchange for noncompetitive imports is stagflationary, increasing prices even under excess capacity, iii) a devaluation has strong effects on income distribution, although output and employment expand, and iv) cuts in government spending are deflationary but the income distribution effects are neutral.     

Applied general equilibrium analysis of trade liberalisation on land-based sectors in Malaysia and Indonesia

This paper presents general equilibrium evaluations of forest sector trade for Southeast Asian exporters. The four scenarios examined range from the 1994 Uruguay Round tariff reductions to a complete liberalisation of forest and agricultural products trade. We find that simultaneous reductions in forest and agricultural sector tariffs make Indonesia and Malaysia worse off. For Indonesia, this is due to the fall in forest rent and agricultural tariff revenues. Malaysia has the highest ratio of agricultural imports to total land-based sector imports, the rise in agricultural prices thus hits Malaysian consumers the hardest.We find that terms of trade effect omitted from the partial equilibrium framework may reduce the welfare calculations for Malaysia and Indonesia in the forest sector trade by as much as 106 and 58%, respectively. This points to the importance of general equilibrium modelling in the logging industry. The same applies to other sector specific analyses where trade is concentrated between few countries.     

Price controls, trade protectionism and political business cycles in the U.S. steel industry

The U.S. steel industry is subject to a microeconomic political business cycle resulting from U.S. Presidents designing protectionist policies on behalf of the steel industry; experiencing complaints from consumers and foreign producers as a result of the policy; modifying the policy which results in complaints from the steel industry; and finally, maneuvering policy back in favor of the industry to achieve re-election. Using a cointegrating vector error correction framework, this paper tests the hypothesized political business cycle for its effect on steel prices. We find that trade protectionism does not seem to have succeeded in its primary objective of supporting prices. By expending so much political capital on ineffective trade protection, the steel industry may have lost the opportunity to focus on more substantive issues that might have restrained factor cost and enhanced its competitive ability. The devolution of the steel industry, ironically, may have resulted from it's persistent pleas for protection. Political business cycles in the steel industry, with all its attendant negative consequences, would not occur if the steel industry did not continually lobby for protection.     

Food security, consumption diversification and foreign exchange balances in Indonesia: Results from a multi-commodity simulation

Many countries adopt economic development strategies, within which an important element is the maintenance of low and stable food prices. In Indonesia, this is achieved principally through government subsidies to consumers of imported rice, the total cost of which fluctuates considerably from year to year, depending on world price movements and domestic production performance. Higher and possibly less stable domestic food prices appear inevitable in Indonesia, however, as the spectre of reduced oil revenues increases the government's concern with the cost of its food policy. Results from a stochastic simulation model of the agricultural sector show that the food price risk to which consumers and producers would be exposed in the absence of the stabilizing component of Indonesia's food policy would be considerable, rendering this component an unlikely area for significant change. A viable policy option appears to be the continuance of rice and wheat price stabilization, but with a graduated increase in the relative price of rice, reaching a total of 10% by 1985. Such a policy could result in net self-sufficiency in foreign exchange from staple food trade by 1990 and an improvement in aggregate economic surplus, although the expected decade improvement in food-energy consumption per capita would fall from 10% to 8%.     

新时期的日美贸易谈判:成果与趋势探析

特朗普执政后,开始实行“美国优先”和贸易保护政策,反对多边主义,主张双边谈判。在美国对日存在大量贸易逆差、中美贸易摩擦持续、日本加快扩展对外经贸关系的形势下,美国与日本缔结双边贸易协定、加强经贸合作的必要性明显上升。2019年4月,美日启动双边贸易谈判,并在半年内签署了初步贸易协定,其范围基本未超日本所要求的货物贸易内容,仅增加了数字贸易领域,反映出日本与美国欲在新一轮国际贸易体系转型中引领规则与标准制定的战略意向。日美贸易协定对日本的预期经济效果低于CPTPP和日欧EPA,尤其是日本的农业将面对更加激烈的竞争。依照特朗普政府对日谈判方针,日美今后还将围绕汇率条款、原产地规则、投资及服务贸易等问题展开谈判,日本仍会面临来自美国的压力与挑战。     

Assessing non-tariff barriers in Syria

International trade in Syria is highly regulated through a combination of tariffs and non-tariff barriers. At 8% of the value of imports on average, effective tariffs are relatively low. However, non-tariff barriers to trade actually make Syria's trade restrictiveness very high. Comparing world and domestic prices of imports indeed suggests that non-tariff barriers increase the domestic price of imported goods by 17% on average, notably the result of significant quantitative restrictions. Using a computable general equilibrium model, the costs of NTBs on the Syrian economy are assessed. Simulations suggest that reallocation gains resulting from a complete removal of NTBs could be substantial. Accordingly, the key message from the analysis is that trade reform if it focuses only on tariff reduction will have limited growth benefits. On the contrary, if the Government abolishes the widespread non-tariff barriers to trade, including the elimination of quantitative trade restrictions, trade policy can become the central instrument to redress Syria's growth prospects.     

Impact of Japanese investment in U.S. automobile production

The transfer of automobile production by Japanese firms to the United States represents a giant direct foreign investment. Using the disaggregated NIRA U.S.-Japan model in the framework of Project LINK, this article evaluates the impact of these investments on the U.S. and Japanese economies. The benefit in terms of auto production, capacity, employment, activity in supplier industries, and aggregate GNP in the United States is readily apparent. Japanese industry has incentives to move production into the United States to avoid protectionism and to guard against adverse movements of the exchange rate and production costs, but there is some loss in output and related variables in Japan.     

Import competition, employment and wages in U.S. manufacturing

This paper uses cointegration analysis to examine if employment and wages in the U.S. manufacturing sector exhibit any long run relationship with import competition. While overall the cointegration analysis supports the results reported in Revenga’s (1992) panel study it indicates that in the long run a positive correlation between import price and employment and/or a negative correlation between import price and wage are sector sensitive. There is also a considerable variation in the magnitude of employment and wage elasticities.     

The international trade in automobiles: Explaining short-run changes in the import share of the United States market, 1979–1981

This paper examines the underlying causes for the rapid rise of the import share of the U.S. automobile market in the 1979 to 1981 time frame. Using data on the import share by state for the 1975–1979 period, a logit model is developed explaining movements in the import share. The principal purpose is to demonstrate that the rapid growth of the import share was due to a unique set of short-run factors such as constrained U.S. small car production capacity and exceptional consumer preference for fuel efficient automobiles. The sensitivity of the import share to changes in different factors is examined. The article concludes that U.S. policy makers concerned with the long-run viability of the U.S. automobile industry should discriminate between changes in import penetration caused by short-run factors and those caused by a secular deterioration of the U.S. comparative advantage in automobile production.     

A critical approach to wage devaluation: The case of Spanish economic recovery

In line with the orientation of EU economic policy, the Spanish government has favoured a strategy of internal devaluation as a way of adjusting price levels within the currency union. The results of empirical studies indicate that the internal devaluation applied in Spain does not seem to have attained the desired goals in terms of reducing the relative prices of exports and consolidating a model of growth based on external demand. Indeed, the estimates drawn up show that tailwinds – the depreciation of the euro and the fall in risk premium as results of the measures taken by the ECB, greater economic activity by trading partners and the fall in the price of oil – exercised a decisive influence in the trends followed by the prices of exports and the balance of trade during the period of crisis management in Spain.