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Reassessing effective protection rates in a trade in tasks perspective: Evolution of trade policy in factory Asia

Antonia Diakantoni and Hubert Escaith ()

No ERSD-2012-13, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division

Abstract: With international trade moving from trade in (final) goods to trade in tasks, effective protection rates (EPRs) are back to the stage, allowing us to measure the overall protection of a product or sector by including the production structure and the origin of the inputs -domestic or imported. Input-output matrices are used in this paper to monitor the production structure of 10 Asian-Pacific countries between 1995 and 2005, and to calculate sectorial EPRs. The paper proposes a series of counter-factual simulation methods aimed at isolating the specific contribution of changes in tariff policies, in production structure or in real exchange rates. Working on international input-output matrices allowed also to compute and compare the average propagation length of a cost-push linked to a sudden change in tariff duties, identifying those sectors that are the most deeply interconnected, both in the intensity and in the length of their inter-industrial foreign relationships.

Keywords: Tariff; Effective Protection; Trade in Value Added; International Outsourcing; Asian Input-Output (search for similar items in EconPapers)
JEL-codes: F13 F23 (search for similar items in EconPapers)
Date: 2012
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Working Paper: Reassessing effective protection rates in a trade in tasks perspective: Evolution of trade policy in "Factory Asia" (2012) Downloads
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