Trade Protectionism and Intra-industry Trade: A USA - EU Comparison

Alexandra Lopes (), Cândida Sousa, Helena Carvalho and Nuno Crespo ()

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this work is to find patterns for products included in the customs tariffs of the USA and the EU (composed of over 5000 products disaggregated at the 6 digit-level) which share similarities, defined by a set of international trade variables, namely the index of revealed comparative advantages (RCA), the Grubel-Lloyd index, and other indicators of international trade. There is a recent strand in the literature advancing a theory that links the degree of intra-industry trade with the level of protectionism. In order to test this theory we use cluster analysis as a method of data analysis and the Grubel-Lloyd index as a classification variable between groups. For each of the analyzed regions we obtain four different groups. Thereafter each of these four clusters are further characterized with the help of the other international trade indicators and the tariffs. Finally, we establish a comparison between the two regions by examining possible differences and similarities. The results show a significant difference in the tariffs applied between the USA and the EU, with the USA presenting a lower level of protectionism. Additionally, the results for the USA show a positive relationship between the degree of intra-industry trade and a lower level of protectionism, while for the EU the results are not conclusive.

Keywords: Trade Policy; Customs Tariff; USA; EU; Intra-industry Trade; Cluster Analysis (search for similar items in EconPapers)
JEL-codes: C38 F12 F13 F14 (search for similar items in EconPapers)
Date: 2013-07-31
New Economics Papers: this item is included in nep-eur and nep-int
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Related works:
Journal Article: Trade Protectionism and Intra-industry Trade: A USA - EU Comparison (2017)
Working Paper: Trade Protectionism and Intra-industry Trade: A USA - EU Comparison (2013)
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