Tariff binding and overhang: Theory and evidence

• 成果类型: Article
• 署名作者: Beshkar, Mostafa; Bond, Eric W.; Rho, Youngwoo
• 署名单位: Indiana University System; Indiana University Bloomington; Vanderbilt University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2015.04.004
• 发表日期: 2015
• 页码: 1-13
• 关键词: TRADE AGREEMENTS; Trade policy flexibility; Tariff binding; Tariff overhang

摘要

Most market access commitments under the WTO are in the form of bindings on applied tariff rates. We observe two important regularities in the data. First, applied tariffs are often lower than the bound tariffs, providing governments with substantial policy flexibility. Second, the extent of flexibility varies substantially across sectors and countries. In a sharp contrast to the prediction of standard trade agreement models, we observe a strong negative correlation between tariff commitments and measures of import market power. We model the trade-off between discipline and flexibility in the design of trade agreements, and argue that recognizing this trade-off is the key to explain the observed patterns in the tariff binding commitments and applied tariffs under the WTO. (C) 2015 Elsevier B.V. All rights reserved.