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Import dynamics and demands for protection

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  • Russell Hillberry
  • Phillip McCalman

Abstract

What kinds of changes in foreign competition lead domestic industries to seek import protection? To address this question, we use detailed monthly US import data to investigate changes in import composition during a 24‐month window immediately preceding the filing of a petition for import protection. A decomposition methodology allows a comparison of imports from two groups of countries supplying the same product: those that are named in the petition and those that are not. The same decomposition can be applied to products quite similar to the imports in question, but not subject to a petition. The results suggest that industries typically seek protection when faced with a specific pattern of shocks. First, a persistent positive relative supply shock favours imports from named countries. Second, a negative demand shock hits imports from all sources just prior to domestic industries’ petition for protection. The relative supply shock is a broad one; it applies both to named commodities and to the comparison product group. The import demand shock, by contrast, is narrow, hitting only named products. This negative import demand shock appears to be a key event in the run‐up to the filing of a petition. This latter shock has been missed by previous studies using more aggregated data. Dynamique des importations et demandes de protection. Quelles sortes de changements dans la concurrence étrangère conduisent des industries domestiques à demander qu'on les protège des importations? Pour analyser cette question, les auteurs utilisent les données mensuelles détaillées des importations aux États‐Unis pour examiner les changements dans la composition des importations au cours des 24 mois précédant le dépôt d'une pétition pour la protection contre l'importation. Une méthodologie de décomposition permet une comparaison avec les importations de deux groupes de pays qui offrent le même produit : ceux qui sont nommés dans la pétition et ceux qui ne le sont pas. Le même processus de décomposition peut être appliqué aux produits assez semblables aux importations en question, mais qui ne sont pas sujets à pétition. Les résultats suggèrent que les industries typiquement demandent protection quand elles sont confrontées à un pattern de chocs : d'abord, un choc positif persistant du côté de l'offre relative qui favorise les importations des pays nommés; ensuite, un choc négatif de la demande qui frappe les importations de partout pour les produits des industries domestiques juste avant la pétition demandant de la protection. Le choc relatif positif du côté de l'offre s'applique vastement à la fois aux biens nommés et à ceux du groupe de produits quasi‐semblables utilisés aux fins de comparaison. D'autre part, le choc relatif négatif dans la demande est assez étroit : il frappe seulement les produits nommés. Le choc négatif dans la demande d'importations semble être un événement clé dans les moments qui mènent au dépôt de la pétition. On n'a pas noté ce dernier choc dans les études antérieures utilisant des données agrégées.

Suggested Citation

  • Russell Hillberry & Phillip McCalman, 2016. "Import dynamics and demands for protection," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(3), pages 1125-1152, August.
  • Handle: RePEc:wly:canjec:v:49:y:2016:i:3:p:1125-1152
    DOI: 10.1111/caje.12227
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    References listed on IDEAS

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    Cited by:

    1. Kuenzel, David J., 2020. "WTO tariff commitments and temporary protection: Complements or substitutes?," European Economic Review, Elsevier, vol. 121(C).
    2. Phillip McCalman & Frank Stähler & Gerald Willmann, 2019. "Contingent trade policy and economic efficiency," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(2), pages 227-255, May.
    3. Chrysostomos Tabakis & Maurizio Zanardi, 2017. "Antidumping Echoing," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 655-681, April.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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