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Tariff Phase-Outs: Theory and Evidence from GATT and NAFTA

In: The Regionalization of the World Economy

  • Carsten Kowalczyk
  • Donald R. Davis

This paper considers tariff phase-outs in multilateral and preferential agreements. The paper finds that early GATT rounds primarily were over bindings of existing rates and that it was not until the 1962-67 Kennedy Round's 50% reduction in manufactured goods tariffs that time paths of tariff reductions became a substantive part of GATT agreements. Existing empirical work has demonstrated that U.S. industries with high initial tariffs tended to receive long periods for tariff adjustment or tended to be exempted from agreed reductions in both the Kennedy and Tokyo Rounds. This paper demonstrates that high U.S. tariffs and little intra-industry trade are associated with long NAFTA phase-out periods for U.S. imports from Mexico. Mexico's phase-outs are correlated, on the other hand, with those of the United States but not generally with Mexico's tariffs.

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This chapter was published in:
  • Jeffrey A. Frankel, 1998. "The Regionalization of the World Economy," NBER Books, National Bureau of Economic Research, Inc, number fran98-1, June.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 7825.
    Handle: RePEc:nbr:nberch:7825
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    Web page: http://www.nber.org
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