WTO Tariff Commitments and Temporary Protection: Complements or Substitutes?

David Kuenzel

No 2018-001, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: There is a long-held notion in the trade policy literature that traditional tariff instruments and temporary protection (TP) measures are substitutes. Despite this prediction, there is only mixed empirical evidence for a link between tariff reductions and the usage pattern of antidumping, safeguard and countervailing duties. Based on recent theoretical advances, I argue in this paper that the relevant trade policy margin for implementing TP measures is instead tariff overhangs, the difference between WTO bound and applied tariffs. Lower tariff overhangs constrain countries to raise their MFN applied rates without legal repercussions, independent of past tariff changes. Using detailed sectoral data for a sample of 30 WTO member countries during the period 1996-2014, I find strong evidence for an inverse link between tariff overhangs and TP activity. This result implies that tariff overhangs and TP measures are substitutes, vindicating the importance of existing tariff commitments as a key determinant of alternative protection instruments.

Keywords: GATT/WTO; Temporary Protection; Tariff Overhang (search for similar items in EconPapers)
JEL-codes: F13 F14 F53 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2018-01
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://repec.wesleyan.edu/pdf/dkuenzel/2018001_kuenzel.pdf (application/pdf)

Related works:
Journal Article: WTO tariff commitments and temporary protection: Complements or substitutes? (2020)
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:wes:weswpa:2018-001

Access Statistics for this paper

More papers in Wesleyan Economics Working Papers from Wesleyan University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Manolis Kaparakis ().