Contingent Protection Research Articles

The Link Between Aid-for-Trade and Contingent Protection

Foreign aid, in theory, is expected to mitigate constraints that impede the economic development of recipient countries. At the same time that help is committed, donors are seemingly taking actions that are harmful to developing economies in obvious ways. An example is the tacit circumvention of the putative rules-based global trading system through contingent protection activities. In this article, it is postulated that, on one hand aid-for-trade (AfT) is expected to have positive impact on the exports of aid recipients by better integration into the global trading order, on the other hand, aid provider (donor) curtails access to its own markets by actuating contingent protection against the recipient (exporter). Using contingent protection cases data from 2003 to 2018 (a 15-year period) against 106 recipient countries of the United States of America’s AfT, this study finds a significant and positive impact of AfT on the surge in contingent protection activities. This effect is entirely driven by the aid for economic infrastructure and services, while the other main category of AfT- production sector, has no discernible effect on the rise in protection against the recipient. To examine the heterogeneity in donor decisions, this study is expanded to other traditional donors like Australia, Canada, the European Union (EU) and New Zealand. This article finds that Australia behaves similar to the USA; however, for Canada and the EU, the relationship between aid and market access is not statistically significant. JEL Codes: F1, F35, O19

Customs Unions and Contingent Protection between Competing Exporters

Customs Unions and Contingent Protection between Competing Exporters

Block-Chain Based Incentive in Vehicular Ad Hoc Networks Using Credit Coin

Vehicular ad hoc networks (VANET) are otherwise called wise transportation frameworks. VANET guarantees auspicious and exact correspondences between vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) to improve street wellbeing and upgrade the productivity of traffic stream. Because of its open remote limit and high versatility, VANET is powerless against pernicious hubs that could get entrance into the system and do genuine medium access control (MAC) layer dangers, for example, denial of service attacks, information alteration attacks, pantomime attacks, Sybil attacks, and replay attacks. With the prevalence of Block Chain comes grave security related concerns. Accomplishing security and discernibility at the same time stays an open inquiry. Endeavors have been made to address the issues, while they may expose to explicit situations. We propose a vehicular declaration convention Echo-Announcement in Credit Coin. It accomplishes productivity and protection safeguarding for the useful use in sending declarations. We plan an impetus component dependent on Block chain in Credit Coin. Clients oversee notoriety focuses while they acquire or spend coins as motivating forces. In the interim, Credit Coin despite everything jam security and accomplishes obscurity. Besides, in view of Block chain, Credit Coin forestalls numerous security attacks and accomplishes contingent protection since Trace administrator will follow malignant hubs when a startling occasion happens.

Protectionism in the Era of Globalisation: The misuse of anti-dumping instruments from an EU perspective

The purpose of the dissertation at hand is to contrast the AdA (Agreement on the Implementation of Article VI of the GATT'94) with anti-dumping investigations carried out by and against the EU. It has been usual to suppose that WTO Members apply the AdA's flexible rules in a protectionist manner. However, hardly any treatise on contingent protection is concerned with this facet of global trade law. The question, also, of the volume of dumped imports, in the sense of negligibility, the impact of geopolitical factors, the extent of protectionism and malpractices in the review phase, has scarcely been examined. Is it true that anti-dumping instruments are being misused in view of the flexible rules of the Anti-dumping Agreement? For, admittedly, malpractices have been forthcoming ever since the WTO came into being. Sharp distinctions are made through a critical examination of inspection documents on the one hand and sixty-six charts which scrutinise every section of the investigative process on the other. The study identifies contingent protectionism in sectors of geopolitical importance, tit-for-tat in the imposition of anti-dumping measures and partiality in the various rates of duties. Furthermore, it identifies malpractices in the determination of negligiblity, normal value, export prices, injury and margins of dumping. The findings shed new light on the functioning of the US International Trade Administration, the DG Trade EU and the PRC Trade Remedy Investigation Bureau. Finally, a solution is sought through the formulation of a new general theory on the detection of sales outside the natural course of world trade and a definition of sales within the ordinary course of trade.

Rents, "infant industry" and contingent protection policies: gains and losses for Argentina’s biodiesel industry / Rents, "infant industry" and contingent protection policies: gains and losses for Argentina’s biodiesel industry

Rents, "infant industry" and contingent protection policies: gains and losses for Argentina’s biodiesel industry / Rents, "infant industry" and contingent protection policies: gains and losses for Argentina’s biodiesel industry

Save the Injured – Don’t Kill IHL: Rejecting Absolute Immunity for ‘Shielding Hospitals’

Abstract This article is a response to Neve Gordon and Nicola Perugini’s thought-provoking article, ‘“Hospital Shields” and the Limits of International Law’, published in this issue. The authors advocate reforming the law to allow hospitals absolute protection, even in cases where they are also used by combatants for military purposes that are harmful to their adversary (‘shielding hospitals’). Defining the contour of the desired protection for hospitals should start with both the institutional and personal attributes justifying their special protection as well as with the empirical data relating to the prevalence of attacks on hospitals – who and what triggers them. Against this background, this reply presents the prevailing law that grants strong protection to hospitals, albeit a contingent one that may be removed in exceptional cases of their abuse. It advocates retaining the contingent protection, though with some adjustments, and argues that the suggested absolute protection – in fact, immunity – for shielding hospitals is neither feasible nor normatively desirable. It would damage the current balance and rationale of the entire body of international humanitarian law in general and have a counter-effect upon the treatment of the sick and wounded in particular. Contrary to its apparent humanitarian rationale, absolute immunity for shielding hospitals would damage their ability to function as medical institutions and allow an adversary who controls a hospital full discretion in selecting its priorities regarding the use of its space and resources and might turn the sick and wounded into a means of warfare.

Free-Trade Areas and Contingent Protection between Competing Exporters

This paper investigates the impact of free-trade areas (FTAs) on the use of contingent protection between competing exporters. We develop a dynamic model similar to the competing-importers one of Tabakis (2015), in which countries are limited to self-enforcing cooperative multilateral trade agreements and the economic environment is characterized by trade-flow volatility. Our analysis demonstrates that the findings of Tabakis (2015) extend to our competing-exporters case. In particular, the parallel formation of different FTAs results in a gradual but permanent easing of multilateral trade tensions, especially as far as contingent protection is concerned. Thus, our results highlight a building-block effect of FTAs on multilateral trade cooperation.

Cap and Escape in Trade Agreements

We propose a model of flexible trade agreements in which verifying the prevailing contingencies is possible but costly. Two types of flexibility emerge: contingent protection, which requires governments to verify the state of the world, and discretionary protection, which allows governments to set tariffs unilaterally. The structure of the GATT/WTO agreement provides these two types of flexibility through a mechanism that we call Cap and Escape. Governments may choose tariffs unilaterally below the negotiated cap, but escaping from the cap requires state verification. We show that this framework explains key features of the GATT/WTO agreements, including the substantial variation across sectors and countries in the level of negotiated tariffs, and the rate at which different flexibility measures are used. (JEL D86, F11, F13, F41)

Size matters! Who is bashing whom in trade war?

In this paper we present a dynamic model of trade wars in contingent protection. We find that “market size” matters in trade wars in the sense that countries are more likely to initiate anti-dumping cases against countries having sufficiently smaller home markets relative to their own, but less likely against countries with larger markets. We test this “selective-targeting hypothesis” using World Bank data of worldwide anti-dumping filings during the years 1995–2014, and find strong support for it. Thus, our study indicates the importance of relative market size in understanding recent patterns of anti-dumping filings and contingent protection in world trade.

Comments by Iris Claus, on Streamlining Non-Tariff Measures in ASEAN: The Way Forward

Iris Claus: The authors investigate non-tariff measures, or NTMs, which are policy measures, other than ordinary custom tariffs, that may have an economic effect on merchandise trade by changing the price and/or the quantity of goods traded. They include consumption standards and contingent protection but exclude production standards, are widely used by countries around the world, and in many cases their use is valid and justified. For example, governments may impose regulation to ensure certain standards of quality for some products or to protect consumers’ health. Nevertheless, a potential concern with NTMs is that they can be used as protectionist measures, and determining if their purpose is for legitimate or protectionist reasons is difficult.

Product Heterogeneity and Cost Allocations in Contingent Trade Protection

AbstractThe WTO allows members to impose contingent protection, including anti‐dumping duties, within agreed constraints. Anti‐dumping proceedings typically name a single captioned product but include large numbers of individual products within that caption. The inclusion of multiple products creates a variety of issues for both anti‐dumping and other contingent protection measures, issues that have been prominent in national actions and WTO dispute settlements, but have been largely ignored in research. This work focuses on the most important such area, the allocation of costs among products in anti‐dumping proceedings. We develop a comprehensive economic analysis for cost allocation issues, and couple it with the accounting tools that must be used for its implementation, to derive the first‐best allocation methods for anti‐dumping purposes. These results have direct relevance in other contingent trade contexts, such as injury determinations and subsidy pass‐through analysis.

Does Anti-dumping Enforcement Generate Threat?

The last two decades have witnessed that countries across the world are guided by the rules and regulations of multilateral trading institutions (for example, World Trade Organization [WTO], International Monetary Fund [IMF]) in order to promote free and fair trade through gradual reduction in trade barriers. The world economy has noticed significant reduction in tariffs, yet we find a rise in non-tariff barriers (NTBs). However, we still find dumping and few other trade strategies of the exporting countries as a major hindrance to free and fair trade. Such behaviour has led to ‘contingent protection’ as a tool of new-protectionism. Among the contingent protection measures, anti-dumping (AD) has evolved as the most popular choice of strategy for the trading nations. The AD policy invokes a threat to the exporter and thereby can change its strategic behaviour. We describe the phenomenon of dumping through a price-leadership model and thereby compute the optimal level of AD duty that can offset dumping. Using a sequential game, we conclude that the credible threat of an AD duty restricts dumping and thereby leads to a win-win situation for both the foreign and domestic firms.

Product Heterogeneity and Cost Allocations in Contingent Trade Protection

The WTO allows members to impose contingent protection, including antidumping duties, within agreed constraints. Antidumping proceedings typically name a single captioned product but include large numbers of individual products within that caption. The inclusion of multiple products creates a variety of issues in both antidumping and other contingent protection instruments, issues that have been prominent in national actions and WTO dispute settlements, but have been largely ignored in research. In this work I focus on the most important such area, the allocation of costs among products in antidumping proceedings. I develop a comprehensive economic analysis for allocation issues, and couple it with the accounting tools that must be used for its implementation. I apply this to the most active area of controversy in this area, the inconsistent national practices in allocating costs to individual goods. These results have direct relevance in other contingent trade contexts, such as injury determinations and subsidy pass-through analysis.The appendices for this paper are available at the following URL: http://ssrn.com/abstract=2435413

Anti-Dumping as Insurance Policy: What the 'Grey Area' Measures Tell Us

A general argument in support of trade remedies is that they act as an insurance policy that allows countries to take on deeper commitments in trade negotiations than they would otherwise be willing to make. This paper reviews both the negotiating history of major trade liberalization initiatives and the largely unexploited history of the use of so-called “grey area” measures in the pre-WTO era to manage pressures on domestic economies emanating from international trade to shed light on the extent to which this argument holds true. The negotiating history makes clear that across-the-board liberalization in the absence of perfect knowledge about the possible consequences in terms of trade pressures depends on the availability of contingent protection. Economic theory demonstrates that such an insurance role is welfare enhancing. The history of use of grey area measures in the pre-WTO period as successive waves of trade liberalizing initiatives were being implemented to manage excessive pressures in a context where the trade flows were not characterized as “unfair” but simply disruptive makes clear that that they were clear substitutes for trade remedies. This history provides the linchpin that allows the identification of the on-going use of trade remedies as an implicit continuation of the management of transient trade pressures. While the use of trade remedies may be defended as welfare enhancing on these grounds, with the individual instances of application of measures analogous to claims on a pre-existing insurance policy, the paper concludes that the design of trade defense laws and the emphasis on “unfair” trade in their justification, makes them ill-suited for this role.

(When) Does Tit‐for‐tat Diplomacy in Trade Policy Pay Off?

AbstractIn international relations, short‐run incentives for non‐cooperation often dominate. Yet, (external) institutions for enforcing cooperation are hampered by national sovereignty, supposedly strengthening the role of self‐enforcing mechanisms. This paper examines their scope with a focus on contingent protection aka tit‐for‐tat in trade policy. Highlighting various strategies in a partial equilibrium framework, we show that retaliation of non‐cooperative behaviour by limiting market access works as a disciplining device quite independently of supply and demand parameters. Our empirical findings are consistent with the theoretical results in that countries more frequently involved in WTO‐mediated disputes entailing tit‐for‐tat strategies pursue on average more liberal trade regimes.

Cap and Escape in Trade Agreements

We characterize the optimal tariff bindings and the escape clause in a trade agreement among asymmetric countries that are subject to idiosyncratic political-economy shocks. We assume that shocks are private information, and that escape clauses allow the use of a costly monitoring technology to reveal the true value of the private information. We define a concept of convergence of tariff preferences, and show that bindings are higher for countries whose preferences are less convergent and for countries with a lower degree of market power. We also show how the introduction of contingent protection will substitute for tariff overhang, and establish that a sufficient condition for contingent protection to eliminate the use of tariff overhang is that tariff preferences be globally convergent.

Trade Liberalization and Antidumping: Is There a Substitution Effect?

AbstractMany nations have undergone significant trade liberalization even as they have increased their use of contingent protection measures. This raises the question of whether some of the trade liberalization efforts, at times accomplished through painful reforms, have been undone through a substitution from tariffs to non‐tariff barriers. Among the new forms of protection, antidumping is the most relevant. This paper examines whether the use of antidumping is systematically influenced by the reduction of applied sectoral tariffs in a sample of 29 developing and six developed countries from 1991 through 2002. Evidence is found of a substitution effect only for a small set of heavy users of antidumping among developing countries. There is no similar statistically significant result for other developing countries or developed countries. Robust evidence is also found of retaliation and deflection effects as determinant of antidumping filings across all subsamples.

Argentina's Contingent Protection Use after the Financial Crisis: There and Back Again?

Argentina, once a prominent example of the ‘Washington consensus,’ took dramatic steps to reduce its integration in the world economy in the aftermath of the peso crisis in 2001. This pattern might suggest that the Argentine government would turn aggressively to contingent protection measures such as antidumping and safeguards in the wake of the 2008 global financial crisis. The data suggest that the share of imports subject to ongoing Argentine contingent protection measures (especially antidumping) has increased from about 1.2% of total imports in 2006 to about 2.7% in 2009. If one considers the impact of suppressed imports, this rises to an estimated 5% in 2009. Argentine antidumping use has retained its focus on developing countries. However, while in earlier periods Brazil was the most frequent target, almost all of the recent antidumping activity has been focused very narrowly on China, a pattern that predates the 2008 crisis. While Argentina has certainly become more aggressive in its use of antidumping since the 1990s, there is little to suggest that it has done so specifically in the wake of the crisis. Instead, Argentine import restrictions are increasingly focused on China alone.

An Analysis of the Special Safeguard Mechanism with Particular Reference to India

The Special Safeguard Mechanism (SSM) is intended to provide contingent protection to poor farmers in developing countries from negative shocks to import prices or from surges in imports. The effects of stochastic import prices and volumes are analysed in a partial equilibrium framework to illustrate the issues involved. The simplicity of the mechanisms for contingent protection illustrated through geometry are contrasted with the modalities that were proposed in July 2008. These are the choice between an import price trigger or an import quantity trigger. The triggers have been incorporated into a computable general equilibrium (CGE) model by Hertel et al. (2010) and stochastic simulations conducted in order to compare their effects on the levels and volatility of key variables. The conclusion is that the quantity trigger is less effective in achieving the principal objective of the SSM.

U.S. Contingent Protection Against Honey Imports: Development Aspects and the Doha Round

On December 10, 2001 the U.S. Department of Commerce (DOC) imposed steep antidumping duties against honey imports from Argentina and China ranging from 32.6 percent to 183.8 percent, and a countervailing duty against Argentina of 5.9 percent. A previous antidumping investigation in 1995 ended with a suspension “agreement” that curtailed U.S. imports from China by around 30 percent. Millions of beekeepers around the world, most of them poor, make a living from honey production, and a free and competitive world market would help raise their standards of living. Nevertheless, the sequential pattern of increasing and widening protectionism followed by the United States, the world’s top importer, to include successful exporters under the effects of its contingent protection measures sends a clear message that other countries should think twice before investing in expanding honey exports to the United States. In addition to looking into the trade effects of these contingent protection measures, Nogues concludes that under the regulatory arrangements of the DOC, Argentina’s beekeepers never had a chance of defending themselves. For example, responding to the DOC’s lengthy and sophisticated questionnaires that sought to determine cost of production went beyond the capacities of poor beekeepers. In the absence of information, the DOC resorted to evidence presented by the petitioners which was riddled with errors. The available evidence suggests that had beekeepers been capable of responding to the questionnaires, the margin of dumping would had been lower, if at all existent. This and other evidence discussed by Nogues suggest the urgent need to introduce reforms into the World Trade Organization antidumping and subsidy agreements. At the minimum what is required is a consensus that all respondents be given the same opportunity by the international trade rules. The author argues that at present this is not the case and offers suggestions for reforms.