On Trade Policy Preference and Offshoring Ties

Subhayu Bandyopadhyay, Arnab Basu, Nancy Chau and Devashish Mitra ()
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Devashish Mitra: Syracuse University

No 15782, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper unpacks the role of the domestic content of imports as a novel source of policy interdependence along the global supply chain. We show how a rise in local contents embodied in imports can skew national trade policy preferences, and pull upstream and downstream countries in asymmetric ways with respect to (i) the nature of unilaterally optimal trade policy prescriptions, and (ii) the attractiveness of leveraging market access-based dispute settlement procedures. We discuss the pros and cons of deep trade integration as a remedy, involving well-enforced labor standards both upstream and downstream as an integral part of trade agreements.

Keywords: offshoring; dispute settlement reciprocity; labor standards (search for similar items in EconPapers)
JEL-codes: F11 F13 F16 F66 O19 O24 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2022-12
New Economics Papers: this item is included in nep-int
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