Trade Protectionism and Intra-industry Trade: A USA - EU Comparison
AbstractThe aim of this work is to find patterns for products included in the customs tariffs of the USA and the EU (composed of over 5000 products disaggregated at the 6 digit-level) which share similarities, defined by a set of international trade variables, namely the index of revealed comparative advantages (RCA), the Grubel-Lloyd index, and other indicators of international trade. There is a recent strand in the literature advancing a theory that links the degree of intra-industry trade with the level of protectionism. In order to test this theory we use cluster analysis as a method of data analysis and the Grubel-Lloyd index as a classification variable between groups. For each of the analyzed regions we obtain four different groups. Thereafter each of these four clusters are further characterized with the help of the other international trade indicators and the tariffs. Finally, we establish a comparison between the two regions by examining possible differences and similarities. The results show a significant difference in the tariffs applied between the USA and the EU, with the USA presenting a lower level of protectionism. Additionally, the results for the USA show a positive relationship between the degree of intra-industry trade and a lower level of protectionism, while for the EU the results are not conclusive.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 49379.
Date of creation: 31 Jul 2013
Date of revision:
Trade Policy; Customs Tariff; USA; EU; Intra-industry Trade; Cluster Analysis;
Other versions of this item:
- Ferreira-Lopes, Alexandra & Sousa, Cândida & Carvalho, Helena & Crespo, Nuno, 2013. "Trade Protectionism and Intra-industry Trade: A USA - EU Comparison," MPRA Paper 49482, University Library of Munich, Germany.
- C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-06 (All new papers)
- NEP-EUR-2013-09-06 (Microeconomic European Issues)
- NEP-INT-2013-09-06 (International Trade)
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