US and Japan rivalry in Philippine interwar import manufactures market. Powerpolitics, trade cost and competitiveness

Alejandro Ayuso Díaz
Authors registered in the RePEc Author Service: Antonio Tena Junguito

IFCS - Working Papers in Economic History.WH from Universidad Carlos III de Madrid. Instituto Figuerola

Abstract: This study examines the asymmetric protectionist policies of the U.S. in the Philippinemarket during the interwar period, focusing on how these policies effectivelymarginalized European powers and the emerging Japan before the Yen devaluation in1931. Using a new database on product and country-level imports from 1913 to 1940,the study concludes that competition was most intense in cotton textiles between theU.S. and Japan. The literature identifies a devalued Yen, lower transport costs, andcheaper prices of cotton manufactures as key Japanese advantages that counterbalancedU.S. protectionism in the Philippines.Regression analysis indicates that tariffs hindered cotton textile exports to thePhilippines during the interwar years, especially affecting Japanese exports before theGreat Depression. Japanese competitiveness before the 1930s relied on governmentsupportedlower freight rates. However, after the Yen devaluation in 1931, theeffectiveness of tariffs diminished, and the devaluation became the principal driver ofJapanese textile exports to the Philippines.To counter this advantage, the USA and Japan agreed to an export restraint in exchange for tariff stabilization at the start of the Commonwealth period in 1935. However, this agreement failed to reduce the value of Japanese cotton textile exports to the Philippines. A significant reduction occurred only after the outbreak of the Sino-Japanese War in 1937.

Keywords: Asymmetric; tariff; policy; US; colonial; markets; Commercial; power; politics; Trade; cost; Exchange; rate; policy; Competition; in; colonial; markets; Import; margins (search for similar items in EconPapers)
JEL-codes: F13 N75 (search for similar items in EconPapers)
Date: 2024-08-19
New Economics Papers: this item is included in nep-his, nep-int and nep-sea
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Working Paper: US and Japan rivalry in Philippine interwar import manufactures market. Power politics, trade cost and competitiveness (2024)
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