IDEAS home Printed from https://ideas.repec.org/a/eee/japwor/v36y2015icp29-41.html
   My bibliography  Save this article

Safeguards and voluntary export restraints under the World Trade Organization

Author

Listed:
  • Kagitani, Koichi
  • Harimaya, Kozo

Abstract

Though the WTO agreement of safeguards prohibits VERs, WTO members can still use VERs without formal intergovernmental agreements. Our theoretical analysis shows that the fear of invoking a safeguard measure by an importing country on a good can induce a disruptive exporter of the good to enforce such a VER under certain conditions (for example, if the number of exporting country is not large). Our empirical analysis, using Japan's first safeguard actions as a case study, suggests that if producers of an exporting country capture an export market and if there is a large drop in their export price, the producers seeing a growing threat of safeguards will enforce such VERs. Our results highlight the need for amendments to the WTO Agreement on Safeguards.

Suggested Citation

  • Kagitani, Koichi & Harimaya, Kozo, 2015. "Safeguards and voluntary export restraints under the World Trade Organization," Japan and the World Economy, Elsevier, vol. 36(C), pages 29-41.
    • Handle: RePEc:eee:japwor:v:36:y:2015:i:c:p:29-41
    DOI: 10.1016/j.japwor.2015.06.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0922142515000304
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas J. Prusa, 1997. "The Trade Effects of U.S. Antidumping Actions," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 191-214 National Bureau of Economic Research, Inc.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry-Specific Protection: Antidumping in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 51-118.
    4. Bhagwati, Jagdish N. & Srinivasan, T. N., 1976. "Optimal trade policy and compensation under endogenous uncertainty: The phenomenon of market disruption," Journal of International Economics, Elsevier, vol. 6(4), pages 317-336, November.
    5. Benjamin H. Liebman, 2006. "Safeguards, China, and the Price of Steel," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 354-373, July.
    6. Prusa, Thomas J., 1992. "Why are so many antidumping petitions withdrawn?," Journal of International Economics, Elsevier, vol. 33(1-2), pages 1-20, August.
    7. Bown, Chad P., 2002. "Why are safeguards under the WTO so unpopular?," World Trade Review, Cambridge University Press, vol. 1(01), pages 47-62, March.
    8. John H. Jackson, 1997. "The World Trading System, 2nd Edition: Law and Policy of International Economic Relations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262600277.
    9. Cima, Lawrence R, 1986. "The Excess Supply-Pure Demand Approach to International Commodity Trade: The Case of Japanese Steel Exports to the United States," Economic Inquiry, Western Economic Association International, vol. 24(4), pages 645-656, October.
    10. Craig Gallet, 1997. "Cyclical fluctuations and coordination in the US steel industry," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 279-285.
    11. Hansen, Wendy L & Prusa, Thomas J, 1997. "The Economics and Politics of Trade Policy: An Empirical Analysis of ITC Decision Making," Review of International Economics, Wiley Blackwell, vol. 5(2), pages 230-245, May.
    12. Jones, Kent, 1984. "The Political Economy of Voluntary Export Restraint Agreements," Kyklos, Wiley Blackwell, vol. 37(1), pages 82-101.
    13. Jozef Konings & Hylke Vandenbussche & Linda Springael, 2001. "Import Diversion under European Antidumping Policy," Journal of Industry, Competition and Trade, Springer, vol. 1(3), pages 283-299, September.
    14. Fischer, Ronald D., 1992. "Endogenous probability of protection and firm behavior," Journal of International Economics, Elsevier, vol. 32(1-2), pages 149-163, February.
    15. Zhihao Yu, 2000. "A model of substitution of non-tariff barriers for tariffs," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1069-1090, November.
    16. Baldwin, Richard, 1987. "Politically realistic objective functions and trade policy PROFs and tariffs," Economics Letters, Elsevier, vol. 24(3), pages 287-290.
    17. Thomas J. Prusa, 2001. "On the spread and impact of anti-dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 591-611, August.
    18. Sykes, Alan O., 2003. "The safeguards mess: a critique of WTO jurisprudence," World Trade Review, Cambridge University Press, vol. 2(03), pages 261-295, November.
    19. Arata Kuno, 2006. "An Evaluation of Japan's First Safeguards Actions," The World Economy, Wiley Blackwell, vol. 29(6), pages 763-782, June.
    20. Moore, Michael O, 1992. "Rules or Politics? An Empirical Analysis of ITC Anti-dumping Decisions," Economic Inquiry, Western Economic Association International, vol. 30(3), pages 449-466, July.
    21. Harimaya, Kozo & Kagitani, Koichi, 2008. "The Economics and Politics of Safeguards - Political Economy of the Japanese Safeguard System for Agricultural Goods -," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 927-952.
    22. Hillman, Arye L & Ursprung, Heinrich W, 1988. "Domestic Politics, Foreign Interests, and International Trade Policy," American Economic Review, American Economic Association, vol. 78(4), pages 719-745, September.
    23. Finger, J M & Hall, H Keith & Nelson, Douglas R, 1982. "The Political Economy of Administered Protection," American Economic Review, American Economic Association, vol. 72(3), pages 452-466, June.
    24. Maurizio Zanardi, 2004. "Antidumping law as a collusive device," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 95-122, February.
    25. Chad P. Bown & Meredith A. Crowley, 2010. "China's export growth and the China safeguard: threats to the world trading system?," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1353-1388, November.
    26. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    27. Robert A. Blecker, 1989. "Markup Pricing, Import Competition, and the Decline of the American Steel Industry," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 12(1), pages 70-87, September.
    28. Kiyoun Sohn & Se-Young Ahn, 2010. "Improving WTO Dispute Settlement Rules: Lessons from the Korea-China Garlic Dispute," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 405-416, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Safeguards; Voluntary export restraints; WTO; Political economy; Agricultural trade;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:japwor:v:36:y:2015:i:c:p:29-41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/505557 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.