Factor adjustment implications of a free trade agreement between the United States and Thailand
Changes in intra-industry specialization indicators are used to assess factor adjustment pressures that may be experienced by U.S. and Thai industries from a proposed U.S.-Thailand Free Trade Agreement (FTA). Many industries experienced large increases in intra-industry trade over the 2000-2008 period. Ten U.S. industries are found to be candidates for factor adjustment pressures based on past experiences. These industries account for 38% of all U.S. imports from Thailand and 4% of imports from all trading partners. Results also show that nine Thai industries face possible adjustment pressures. These industries account for 9% of Thai imports from the United States. An FTA should result in a larger increase in U.S. exports to Thailand than U.S. imports from Thailand because Thai exporters face much lower tariffs in the U.S. market than do U.S. exporters in the Thai market.
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