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Tariff Phase-Outs: Theory and Evidence from GATT and NAFTA

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  • Carsten Kowalczyk
  • Donald Davis

Abstract

This paper considers tariff phase-outs in multilateral and preferential agreements. The paper finds that early GATT rounds primarily were over bindings of existing rates and that it was not until the 1962-67 Kennedy Round's 50% reduction in manufactured goods tariffs that time paths of tariff reductions became a substantive part of GATT agreements. Existing empirical work has demonstrated that U.S. industries with high initial tariffs tended to receive long periods for tariff adjustment or tended to be exempted from agreed reductions in both the Kennedy and Tokyo Rounds. This paper demonstrates that high U.S. tariffs and little intra-industry trade are associated with long NAFTA phase-out periods for U.S. imports from Mexico. Mexico's phase-outs are correlated, on the other hand, with those of the United States but not generally with Mexico's tariffs.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5421.

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Date of creation: Jan 1996
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Publication status: published as The Regionalization of the World Economy, Frankel, Jeffrey, ed., Chicago: University of Chicago Press, 1998.
Handle: RePEc:nbr:nberwo:5421

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  1. G. K. Helleiner, 1977. "The Political Economy of Canada's Tariff Structure: An Alternative Model," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 318-26, May.
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  4. Jeffrey J. Schott, 1994. "Uruguay Round: An Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 64.
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  16. 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.
  17. Bond, E.W. & Syropoulos, C., 1993. "Optimality and Stability of Regional Trading Blocs," Discussion Papers 93-11, Department of Economics, University of Birmingham.
  18. Paul Krugman, 1989. "Is Bilateralism Bad?," NBER Working Papers 2972, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: job flows and trade: the case of NAFTA," Working Papers 02-8, Federal Reserve Bank of Boston.
  2. Antoni Estevadeordal & Caroline Freund & Emanuel Ornelas, 2008. "Does regionalism affect trade liberalization towards non-members?," LSE Research Online Documents on Economics 19584, London School of Economics and Political Science, LSE Library.
  3. Hideo Konishi & Carsten Kowalczyk & Tomas Sjostrom, 2003. "Free Trade, Customs Unions, and Transfers," Boston College Working Papers in Economics 568, Boston College Department of Economics.
  4. Iacovone, Leonardo, 2012. "The better you are the stronger it makes you: Evidence on the asymmetric impact of liberalization," Journal of Development Economics, Elsevier, vol. 99(2), pages 474-485.
  5. Robert C. Feenstra, 1997. "U.S. Exports, 1972-1994: With State Exports and Other U.S. Data," NBER Working Papers 5990, National Bureau of Economic Research, Inc.
  6. Caroline Freund, 2004. "Reciprocity in Free Trade Agreements," Working Papers Central Bank of Chile 279, Central Bank of Chile.
  7. Emilio Gutierrez & Kensuke Teshima, 2011. "Import Competition and Environmental Performance: Evidence from Mexican Plant-level and Satellite Imagery Data," Working Papers 1101, Centro de Investigacion Economica, ITAM.
  8. Carsten Kowalczyk & Raymond Riezman, 2009. "Trade Agreements," CESifo Working Paper Series 2660, CESifo Group Munich.
  9. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," NBER Working Papers 8515, National Bureau of Economic Research, Inc.
  10. Alejandro CastaƱeda, 2003. "Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization," Economia Mexicana NUEVA EPOCA, , vol. 0(2), pages 209-230, July-Dece.
  11. Andreas Waldkirch, 2011. "Comparative advantage FDI? A host country perspective," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(3), pages 485-505, September.
  12. Arvind Panagariya, 1999. "The Regionalism Debate: An Overview," The World Economy, Wiley Blackwell, vol. 22(4), pages 477-512, 06.
  13. M. Ayhan Kose & Christopher M. Towe & Guy Meredith, 2004. "How Has Nafta Affected the Mexican Economy? Review and Evidence," IMF Working Papers 04/59, International Monetary Fund.

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