Global value chains and the removal of trade protection

Chad Bown, Aksel Erbahar and Maurizio Zanardi

European Economic Review, 2021, vol. 140, issue C

Abstract: This paper examines how trade protection is affected by changes in the value-added content of production arising through global value chains (GVCs). Exploiting a new set of WTO rules adopted in 1995 that impose an exogenously-timed requirement for countries to re-evaluate their previously-imposed trade protection, we adopt an instrumental variables strategy and identify the causal effect of GVC integration on the likelihood that a trade barrier is removed. Using a newly constructed dataset of protection removal decisions involving 10 countries, 41 trading partners, and 18 industries over 1995–2013, we find that bilateral industry-specific domestic value-added growth in foreign production significantly raises the probability of removing a duty. The results are not limited to imports from China but are only found for the protection decisions of high-income countries. Back-of-the-envelope calculations indicate that rapid GVC growth in the 2000s freed 15% of the trade flows subject to the most common temporary restrictions (i.e. antidumping) applied by high-income countries in 2007.

Keywords: Global value chains; Trade protection; Antidumping (search for similar items in EconPapers)
JEL-codes: F13 F14 F68 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Global Value Chains and the Removal of Trade Protection (2020)
Working Paper: Global Value Chains and the Removal of Trade Protection (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:140:y:2021:i:c:s0014292121002361

DOI: 10.1016/j.euroecorev.2021.103937

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