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Are Imports to Blame?: Attribution of Injury Under the 1974 Trade Act

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  • Robert S. Pindyck
  • Julio J. Rotemberg

Abstract

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.

Suggested Citation

  • Robert S. Pindyck & Julio J. Rotemberg, 1985. "Are Imports to Blame?: Attribution of Injury Under the 1974 Trade Act," NBER Working Papers 1640, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1640
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    Cited by:

    1. Kitano, Taiju & Ohashi, Hiroshi, 2009. "Did US safeguards resuscitate Harley-Davidson in the 1980s?," Journal of International Economics, Elsevier, vol. 79(2), pages 186-197, November.
    2. repec:ebl:ecbull:v:6:y:2005:i:5:p:1-10 is not listed on IDEAS
    3. Stefano Federico, 2014. "Industry Dynamics and Competition from Low-Wage Countries: Evidence on Italy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 389-410, June.
    4. Carter, Colin & Chadee, Doren & Darko, Kwame, 1999. "Are Subsidies to be Blamed? A Reexamination of U.S. Countervailing Duty on Hog Imports From Canada," Journal of Policy Modeling, Elsevier, vol. 21(7), pages 823-830, December.
    5. David Sharp & Kenneth Zantow, 2005. "Attribution of injury in the shrimp antidumping case: A simultaneous equations approach," Economics Bulletin, AccessEcon, vol. 6(5), pages 1-10.

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