How Should "Protection" be Evaluated in Art. III GATT Disputes ?

Damien Neven

Cahiers de Recherches Economiques du Département d'économie from Université de Lausanne, Faculté des HEC, Département d’économie

Abstract: This paper considers the economic analysis protection in Art. III GATT disputes. We first observe that the appropriate measure of protection and the level of protection that is acceptable have hardly been discussed in the case law and that panels tend to presume that a strong substitution between domestic and foreign products always lead to substantial protection. Next, we consider a stylised model of trade and find that the ability to raise price is a robust measure of protection and that protection falls significantly (for a given barrier) with the degree of product differentiation but also with the degree of rivalry. We also observe that the effects of non-tariff barriers on import values in ambiguous so that imports are not a robust measure of protection. Our findings suggest that the distinction drawn in the case law between "like" and "directly competitive and substitutable" products is not helpful. Finally, we suggest a method to evaluate protection in trade disputes which is inspired by the definition of the relevant market in antitrust.

Keywords: protection; GATT; market definition (search for similar items in EconPapers)
JEL-codes: F13 K33 L19 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2000-07
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Published in European Journal of Political Economy, vol. 17 (2), June 2001, pp. 421-444

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http://www.hec.unil.ch/deep/textes/00.15.pdf (application/pdf)

Related works:
Working Paper: How Should ?Protection? be Evaluated in Art. III GATT Disputes? (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:lau:crdeep:00.15

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