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American and Australian Tariff Policies: Do They Rock or Tango or Roll?

Author

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  • Aurélie Cassette

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Etienne Farvaque

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

How can two countries' trade policies be related to each other? A first possibility is that they are not related at all and that each country's tariffs are defined under national considerations (the "rock" hypothesis). A second is that each country adapts its tariffs in reaction to what the other does (the "tango" hypothesis). A third is that both countries react to events happening in the rest of the world (the "roll" possibility). This paper examines the determinants of Australia's and the US' average tariff levels. Relying on historical data that cover a century (1904 to 2005), the three hypotheses are examined. The results indicate a strong long-run relation between the US and the Australian tariffs. Interrelations are also exhibited, with the US decisions influencing more strongly the Australian tariffs than the opposite. The results are important to assess the sustainability and stability of the regional trade agreements in the Pacific area.

Suggested Citation

  • Aurélie Cassette & Etienne Farvaque, 2022. "American and Australian Tariff Policies: Do They Rock or Tango or Roll?," Post-Print hal-03968034, HAL.
    • Handle: RePEc:hal:journl:hal-03968034
    DOI: 10.3390/su142012973
    Note: View the original document on HAL open archive server: https://hal.science/hal-03968034v1
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