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Reciprocity and Retaliation in U.S. Trade Policy


  • Kimberly Ann Elliott

    (Peterson Institute for International Economics)

  • Thomas O. Bayard


The increasing use of activist unilateral policies by the United States to open foreign markets or deter unfair trading practices is highly controversial. This study reexamines the arguments for and against reciprocity and retaliation in light of actual experience since the early 1980s, especially the more aggressive use by the United States of section 301 of the Trade Act of 1974, which gives the president broad authority to retaliate against "unjustifiable, unreasonable, or discriminatory" foreign trade practices. It analyzes the advantages and disadvantages of these policies and the circumstances under which they are likely to succeed or fail. The study contains an empirical assessment of all section 301 cases concluded between 1975 and 1993. It also provides detailed case studies of various trade conflicts including the Super 301 negotiations involving Japan, Brazil, India, Taiwan, and Korea, financial services disputes with Japan and the European Union, the US-EU conflict over oilseeds, and the US-Japan beef and citrus negotiations.The authors recommend against the future use of Super 301 and urge that the United States pursue a strategy of aggressive multilateralism in the new World Trade Organization.

Suggested Citation

  • Kimberly Ann Elliott & Thomas O. Bayard, 1994. "Reciprocity and Retaliation in U.S. Trade Policy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 78.
  • Handle: RePEc:iie:ppress:78

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    Cited by:

    1. Byron Gangnes & Craig Parsons, 2007. "Have US–Japan Trade Agreements Made a Difference?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 12(4), pages 548-566.
    2. Bruce A. Blonigen & Robert C. Feenstra, 1997. "Protectionist Threats and Foreign Direct Investment," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 55-80 National Bureau of Economic Research, Inc.
    3. Guanyi Leu, 2011. "ASEAN’s Preferential Trade Agreements (PTA) Strategy," Journal of Current Southeast Asian Affairs, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 30(2), pages 31-64.
    4. Richard Sherman & Johan Eliasson, 2006. "Trade Disputes and Non-state Actors: New Institutional Arrangements and the Privatisation of Commercial Diplomacy," The World Economy, Wiley Blackwell, vol. 29(4), pages 473-489, April.
    5. Alasdair R. Young, 2004. "The Incidental Fortress: The Single European Market and World Trade," Journal of Common Market Studies, Wiley Blackwell, vol. 42(2), pages 393-414, June.
    6. Maxim Engers & Jonathan Eaton, 1999. "Sanctions: Some Simple Analytics," American Economic Review, American Economic Association, vol. 89(2), pages 409-414, May.
    7. Bown, Chad P. & Prusa, Thomas J., 2010. "U.S. antidumping: much ado about zeroing," Policy Research Working Paper Series 5352, The World Bank.
    8. Daniel W. Drezner, 2000. "Outside the box: Explaining sanctions in pursuit of foreign economic goals," International Interactions, Taylor & Francis Journals, vol. 26(4), pages 379-410, April.
    9. Kenneth Kasa, 1995. "Gaiatsu," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue sep15.
    10. Coriat, Benjamin, 2008. "L’installation de la Finance en France," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 3.
    11. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    12. repec:dau:papers:123456789/6629 is not listed on IDEAS
    13. Daniela Benavente, 2010. "Constraining and supporting effects of the multilateral trading system on U.S. unilateralism," IHEID Working Papers 09-2010, Economics Section, The Graduate Institute of International Studies.

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