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Protection for the Neediest? Comparative Advantage, Tariffs, and Political Economy Dynamics under NAFTA

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  • Kyle Van Rensselaer

Abstract

In theory, a country will impose tariff barriers to protect the domestic industries and firms that are less competitive relative to foreign imports. This study investigates whether revealed comparative advantage (RCA) is related to tariff protection in the three large North American economies. I find little evidence for the hypothesis that higher RCA values always correspond to lower tariff levels. The effects of RCA on tariffs are heterogeneous across sectors; consumer goods are likelier to see higher tariffs as RCA increases than agricultural or other goods. These results challenge the theory that export-competitive goods will necessarily receive less tariff protection.

Suggested Citation

  • Kyle Van Rensselaer, 2022. "Protection for the Neediest? Comparative Advantage, Tariffs, and Political Economy Dynamics under NAFTA," The International Trade Journal, Taylor & Francis Journals, vol. 36(3), pages 200-218, May.
  • Handle: RePEc:taf:uitjxx:v:36:y:2022:i:3:p:200-218
    DOI: 10.1080/08853908.2022.2041509
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