[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2023-099.html
   My bibliography  Save this paper

Retaliation through Temporary Trade Barriers

Author

Listed:
  • Davide Furceri
  • Mr. Jonathan David Ostry
  • Mr. Chris Papageorgiou
  • Pauline Wibaux
Abstract
Are Temporary Trade Barriers (TTBs) introduced for strategic reasons? To answer this question, we construct a novel sectoral measure of retaliation using daily bilateral data on TTB responses in 1220 subsectors across a panel of 25 advanced and emerging market economies over 1989-2019. Stylized facts and econometric analysis suggest that within-year responses are more important in terms of intensity and frequency than commonly understood from the existing literature, which has tended to ignore them. We find that retaliation often consists of responses across many sectors and that same-sector retaliation is far from being the norm. In addition, we find that larger countries tend to retaliate more, and that retaliation is larger during periods of higher unemployment and when the trading partner targeted a domestic comparative advantage sector.

Suggested Citation

  • Davide Furceri & Mr. Jonathan David Ostry & Mr. Chris Papageorgiou & Pauline Wibaux, 2023. "Retaliation through Temporary Trade Barriers," IMF Working Papers 2023/099, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2023/099
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=533312
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chad P. Bown, 2005. "Trade Remedies and World Trade Organization Dispute Settlement: Why Are So Few Challenged?," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 515-555, June.
    2. Chad P. Bown & Meredith A. Crowley, 2013. "Self-Enforcing Trade Agreements: Evidence from Time-Varying Trade Policy," American Economic Review, American Economic Association, vol. 103(2), pages 1071-1090, April.
    3. Thomas J. Prusa & Susan Skeath, 2021. "The Economic and Strategic Motives for Antidumping Filings," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 11, pages 233-257, World Scientific Publishing Co. Pte. Ltd..
    4. Kris James Mitchener & Kevin Hjortshøj O'Rourke & Kirsten Wandschneider, 2022. "The Smoot-Hawley Trade War," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2500-2533.
    5. Martin, Philippe & Delpeuch, Samuel & Fize, Etienne, 2021. "Trade Imbalances and the Rise of Protectionism," CEPR Discussion Papers 15742, C.E.P.R. Discussion Papers.
    6. Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
    7. Bagwell, Kyle & Staiger, Robert W, 1990. "A Theory of Managed Trade," American Economic Review, American Economic Association, vol. 80(4), pages 779-795, September.
    8. Grossman, Gene M & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 675-708, August.
    9. Bown, Chad P., 2022. "Trump Ended WTO Dispute Settlement. Trade Remedies are Needed to Fix it," World Trade Review, Cambridge University Press, vol. 21(3), pages 312-329, July.
    10. Bagwell Kyle & Staiger Robert W., 2003. "Protection and the Business Cycle," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-45, September.
    11. Michael M. Knetter & Thomas J. Prusa, 2021. "Macroeconomic factors and antidumping filings: evidence from four countries," World Scientific Book Chapters, in: Thomas J Prusa (ed.), Economic Effects of Antidumping, chapter 8, pages 153-169, World Scientific Publishing Co. Pte. Ltd..
    12. Kuenzel, David J., 2020. "WTO tariff commitments and temporary protection: Complements or substitutes?," European Economic Review, Elsevier, vol. 121(C).
    13. Boffa, Mauro & Olarreaga, Marcelo, 2012. "Protectionism during the crisis: Tit-for-tat or chicken-games?," Economics Letters, Elsevier, vol. 117(3), pages 746-749.
    14. Michael O. Moore & Maurizio Zanardi, 2011. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," Review of Development Economics, Wiley Blackwell, vol. 15(4), pages 601-619, November.
    15. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
    16. Bown, Chad P. & Tovar, Patricia, 2011. "Trade liberalization, antidumping, and safeguards: Evidence from India's tariff reform," Journal of Development Economics, Elsevier, vol. 96(1), pages 115-125, September.
    17. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    18. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry-Specific Protection: Antidumping in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 51-118.
    19. Douglas A. Irwin, 1998. "The Smoot-Hawley Tariff: A Quantitative Assessment," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 326-334, May.
    20. Robert M. Feinberg & Kara M. Reynolds, 2006. "The Spread of Antidumping Regimes and the Role of Retaliation in Filings," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 877-890, April.
    21. Mr. Shekhar Aiyar & Mr. Jiaqian Chen & Mr. Christian H Ebeke & Mr. Roberto Garcia-Saltos & Tryggvi Gudmundsson & Ms. Anna Ilyina & Mr. Alvar Kangur & Tansaya Kunaratskul & Mr. Sergio L. Rodriguez & Mi, 2023. "Geoeconomic Fragmentation and the Future of Multilateralism," IMF Staff Discussion Notes 2023/001, International Monetary Fund.
    22. Blonigen, Bruce A. & Bown, Chad P., 2003. "Antidumping and retaliation threats," Journal of International Economics, Elsevier, vol. 60(2), pages 249-273, August.
    23. Martin, Alberto & Vergote, Wouter, 2008. "On the role of retaliation in trade agreements," Journal of International Economics, Elsevier, vol. 76(1), pages 61-77, September.
    24. Furceri, Davide & Ostry, Jonathan D. & Papageorgiou, Chris & Wibaux, Pauline, 2021. "Retaliatory temporary trade barriers: New facts and patterns," Journal of Policy Modeling, Elsevier, vol. 43(4), pages 873-891.
    25. Bohara, Alok K & Kaempfer, William H, 1991. "A Test of Tariff Endogeneity in the United States," American Economic Review, American Economic Association, vol. 81(4), pages 952-960, September.
    26. Harrison, Glenn W & Rutstrom, E E, 1991. "Trade Wars, Trade Negotiations and Applied Game Theory," Economic Journal, Royal Economic Society, vol. 101(406), pages 420-435, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Estefania-Flores, Julia & Furceri, Davide & Hannan, Swarnali A. & Ostry, Jonathan D. & Rose, Andrew K., 2023. "Are trade restrictions counter-cyclical? Evidence from a new aggregate measure," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 745-767.
    2. Louise Curran & Carlos Carrasco-Farré, 2024. "Leveraging natural language processing techniques to explore the potential impact of the EU’s Carbon Border Adjustment Mechanism (CBAM)," Journal of International Business Policy, Palgrave Macmillan, vol. 7(2), pages 181-202, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Bown, Chad P. & Crowley, Meredith A., 2014. "Emerging economies, trade policy, and macroeconomic shocks," Journal of Development Economics, Elsevier, vol. 111(C), pages 261-273.
    3. Kuenzel, David J., 2020. "WTO tariff commitments and temporary protection: Complements or substitutes?," European Economic Review, Elsevier, vol. 121(C).
    4. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    5. Jakubik, Adam & Piermartini, Roberta, 2023. "How WTO commitments tame uncertainty," European Economic Review, Elsevier, vol. 157(C).
    6. Staiger, Robert & Bagwell, Kyle & Bown, Chad, 2015. "Is the WTO Passé?," CEPR Discussion Papers 10672, C.E.P.R. Discussion Papers.
    7. Georgios Georgiadis & Johannes Gräb, 2016. "Growth, Real Exchange Rates and Trade Protectionism since the Financial Crisis," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 1050-1080, November.
    8. Ning Meng & Chris Milner & Huasheng Song, 2016. "Differences in the determinants and targeting of antidumping: China and India compared," Applied Economics, Taylor & Francis Journals, vol. 48(43), pages 4083-4097, September.
    9. Miyagiwa, Kaz & Song, Huasheng & Vandenbussche, Hylke, 2016. "Size matters! Who is bashing whom in trade war?," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 33-45.
    10. Vandenbussche, Hylke & Zanardi, Maurizio, 2010. "The chilling trade effects of antidumping proliferation," European Economic Review, Elsevier, vol. 54(6), pages 760-777, August.
    11. Bagwell, Kyle & Staiger, Robert W., 2009. "The WTO: Theory and practice," WTO Staff Working Papers ERSD-2009-11, World Trade Organization (WTO), Economic Research and Statistics Division.
    12. Magdalene Silberberger & Anja Slany & Christian Soegaard & Frederik Stender, 2022. "The Aftermath of Anti-Dumping: Are Temporary Trade Barriers Really Temporary?," Open Economies Review, Springer, vol. 33(4), pages 677-704, September.
    13. Chad P. Bown, 2010. "China's WTO Entry: Antidumping, Safeguards, and Dispute Settlement," NBER Chapters, in: China's Growing Role in World Trade, pages 281-337, National Bureau of Economic Research, Inc.
    14. Hylke Vandenbussche & Maurizio Zanardi, 2008. "What explains the proliferation of antidumping laws? [‘Antidumping Laws in the US; Use and Welfare Consequences’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 23(53), pages 94-138.
    15. Martin, Alberto & Vergote, Wouter, 2008. "On the role of retaliation in trade agreements," Journal of International Economics, Elsevier, vol. 76(1), pages 61-77, September.
    16. David J. Kuenzel, 2023. "Non‐tariff measures: What's tariffs got to do with it?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 133-163, February.
    17. Bown,Chad P. & Crowley,Meredith A & Bown,Chad P. & Crowley,Meredith A, 2016. "The empirical landscape of trade policy," Policy Research Working Paper Series 7620, The World Bank.
    18. Groppo, Valeria & Piermartini, Roberta, 2014. "Trade policy uncertainty and the WTO," WTO Staff Working Papers ERSD-2014-23, World Trade Organization (WTO), Economic Research and Statistics Division.
    19. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    20. Chad P. Bown, 2018. "Trade Policy Toward Supply Chains After the Great Recession," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 602-616, September.

    More about this item

    Keywords

    Trade retaliation; Protectionism; Antidumping; Temporary Trade Barriers; IMF working paper 23/99; comparative advantage sector; sector retaliation; trade barriers data; Trade barriers; Tariffs; Imports; Trade policy; Exports; Global;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2023/099. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.