The Safeguard Clause, Asymmetric Information, and Endogenous Protection

Philippe Kohler and Michael Moore

Review of International Economics, 2001, vol. 9, issue 1, 52-67

Abstract: When imports surge, governments often must seek simultaneously to satisfy protectionist pressures through increased tariffs, induce adjustment to foreign competition, and minimize consumer costs of protection. The WTO’s safeguard clause can be viewed as an attempt to resolve these potentially conflicting goals since it allows governments to offer an implicit contract to protected industries to induce adjustment. In this paper, we show that with asymmetric information about costs, protected industries behave strategically which leads to under‐adjustment. The safeguard clause therefore cannot optimally resolve the conflict among domestic political objectives.

Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1467-9396.00263

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:bla:reviec:v:9:y:2001:i:1:p:52-67

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().