Are Imports to Blame? Attribution of Injury under the 1974 Trade Act
Under Section 201 of the 1974 Trade Act, a domestic industry can obtain temporary protection against imports by demonstrating before the International Trade Commission that it has been injured, and that imports have been the"substantial cause" of injury --i.e.,"a cause which is important and not less than any other cause." To date, the ITC lacks a coherent framework for selecting a menu of other factors which might be considered as causes of injury, and for weighing the effects of these other factors against those of imports.This paper sets forth a straightforward economic and statistical framework for use in Section 201 cases. This framework is based on the fact that if the domestic industry is competitive, injury can arise from one or more of three broad sources: adverse shifts in market demand, adverse shifts in domestic supply, or increased imports. We show how these sources of injury can be distinguished in theory, and statistically evaluated in practice. As an illustrative example, we apply the framework to the case of the copper industry, which petitioned the ITC for relief in 1984. Although that industry has indeed suffered injury, we show that the "substantial cause" was not imports, but instead increasing costs and decreasing demand.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.