WTO Exceptions as Insurance

Ronald Fischer and Thomas Prusa

Chapter 12 in Economic Effects of Antidumping, 2021, pp 259-271 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The paper formalizes the notion that GATT exceptions such as antidumping and escape clause actions can act as insurance for import competing sectors affected by adverse price shocks. The authors use a general-equilibrium model with several import competing sectors and assume incomplete markets so that agents cannot contract insurance. It is shown that sector-specific contingent protection measures are superior to uniform contingent tariffs as an insurance mechanism. A tax-cum-subsidy policy (i.e., taxing all sectors in order to subsidize the shocked sector) also improves welfare and is superior to contingent protection.

Keywords: Antidumping; Trade Effects; USA; US; Trade Protection; Trade Barriers; Temporary Trade Barriers; Pricing Behaviour; Antidumping Law; Law; Cost-Based Trade Policy; Macroeconomy; Cumulation; ITC Decision-making; WTO; Safeguard Protection (search for similar items in EconPapers)
Date: 2021
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Journal Article: WTO Exceptions as Insurance (2003)
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