Reciprocity and the China Shock

Chad Bown, Lorenzo Caliendo, Fernando Parro, Robert Staiger and Alan O. Sykes

No 32835, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We formalize the GATT/WTO principle of reciprocity in workhorse quantitative trade models, characterizing reciprocal tariff cuts that hold terms of trade fixed and investigating their labor-market impacts. We provide closed-form expressions mapping reciprocal tariff cuts to labor market dislocation. We demonstrate that a country’s own tariff liberalization is a sufficient statistic for the labor-market adjustments it can expect from tariff negotiations that satisfy reciprocity. Applying our theoretical results to China’s 2001 WTO accession, we find that China’s tariff reductions exceeded reciprocity norms, increasing real incomes but amplifying the manufacturing employment dislocation – the China Shock – in the United States and globally.

JEL-codes: F02 F1 F13 F14 F16 F66 F68 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-cna and nep-int
Note: ITI
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w32835.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:32835

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32835
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().