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Trade deflection and trade depression

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Author Info
Chad Bown
Meredith Crowley

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Abstract

This is the first paper to empirically examine whether the United States' imposition of a special import restraint distorts foreign exports and thus affects world trade flows. We first develop a theoretical model of worldwide trade in which the imposition of a special import restraint by one country - an antidumping duty or a safeguard measure - causes significant distortions in world trade flows. We then empirically test this model by investigating the effect of US special import restraints on Japanese exports of roughly 3500 commodities into 29 countries between 1992 and 2001. Our estimation of a fixed-effects model of Japanese exports yields evidence that US import restraints both deflect and depress Japanese export flows. Imposition of a US antidumping duty against Japan deflects trade: export growth to non-US trading partners rises by 11 to 22 percentage points. The simultaneous imposition of a US antidumping duty against both Japan and a third country depresses trade: Japanese export growth to the third country falls by 0 to 18 percentage points. The magnitude of the trade depression effect is also larger when the US imposes an antidumping duty against a third country but not against Japan. A US safeguard measure leads Japanese export growth to third countries to rise 12 to 15 percentage points.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-03-26.

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Date of creation: 2003
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Handle: RePEc:fip:fedhwp:wp-03-26

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Related research
Keywords: Trade ; Exports ; Antidumping duties;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  5. Bond, Eric W. & Syropoulos, Constantinos, 1996. "The size of trading blocs Market power and world welfare effects," Journal of International Economics, Elsevier, vol. 40(3-4), pages 411-437, May. [Downloadable!] (restricted)
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  14. Bagwell, Kyle & Staiger, Robert W, 1997. "Multilateral Tariff Cooperation during the Formation of Free Trade Areas," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 291-319, May.
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  15. Charles R. Nelson & Richard Startz, 1988. "Some Further Results on the Exact Small Sample Properties of the Instrumental Variable Estimator," NBER Technical Working Papers 0068, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robert M. Feinberg & Kara M. Olson, 2004. "The Spread of Antidumping Regimes and the Role of Retaliation in Filings," International Trade 0411003, EconWPA. [Downloadable!]
    Other versions:
  2. Michael Moore & Maurizio Zanardi, 2008. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," ECARES Working Papers 2008_024, Université Libre de Bruxelles, Ecares. [Downloadable!]
  3. Hylke Vandenbussche & Ziga Zarnic, 2006. "Did US Safeguard Protection on Steel Affect Market Power of European Steel Producers?," LICOS Discussion Papers 17606, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  4. Bown, Chad P., 2005. "Global antidumping database version 1.0," Policy Research Working Paper Series 3737, The World Bank. [Downloadable!]
  5. Robert M. Feinberg & Kara M. Reynolds, 2008. "Friendly Fire? The Impact of US Antidumping Enforcement on US Exporters," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(2), pages 366-378, July. [Downloadable!] (restricted)
    Other versions:
  6. Bown, Chad P., 2009. "The global resort to antidumping, safeguards, and other trade remedies amidst the economic crisis," Policy Research Working Paper Series 5051, The World Bank. [Downloadable!]
  7. Irene Brambilla & Guido Porto & Alessandro Tarozzi, 2008. "Adjusting to Trade Policy: Evidence from U.S. Antidumping Duties on Vietnamese Catfish," NBER Working Papers 14495, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Jozef Konings & Hylke Vandenbussche, 2009. "Antidumping Protection hurts Exporters:Firm-level evidence from France," LICOS Discussion Papers 24109, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
    Other versions:
  9. Chad P. Bown, 2007. "China's WTO Entry: Antidumping, Safeguards, and Dispute Settlement," NBER Working Papers 13349, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Chad Bown & Meredith Crowley, 2004. "China's export growth and U.S. trade policy," Working Paper Series WP-04-28, Federal Reserve Bank of Chicago. [Downloadable!]
  11. Petros C. Mavroidis & Kyle Bagwell & Robert W. Staiger, 2004. "The case for auctioning countermeasures in the WTO," Discussion Papers 0405-08, Columbia University, Department of Economics. [Downloadable!]
    Other versions:
  12. Robert M. Feinberg & Kara M. Olson, 2005. "Tariff Liberalization and Increased Administrative Protection: Is There a Quid Pro Quo?," International Trade 0501001, EconWPA. [Downloadable!]
    Other versions:
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