The Safeguard Clause, Asymmetric Information, and Endogenous Protection

Kohler, Philippe; Moore, Michael O.

doi:10.1111/1467-9396.00263

Cited by 5 publications

(3 citation statements)

References 14 publications

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“…A better mechanism, for example, might include requiring firms receiving negative verdicts to compensate the government for its costs in conducting the investigation. Kohler and Moore (2001) consider implicit contracts under safeguards to induce a firm to engage in the optimal level of effort to adjust to the pressure of imports when the government trades off political returns against adjustment costs and its information is incomplete. 6.…”

Section: Discussionmentioning

confidence: 99%

Endogenous Obfuscation in Injury Investigations

Hartigan

2002

Economica

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Eligibility for public benefits may require an injury investigation. The thoroughness of the investigation is a policy decision of the government. An investigative authority chooses the optimal effort to infer from a noisy signal (business plan) the quality of management and market conditions when a firm petitions for benefits. Under plausible conditions, firms will underperform to raise the probability of an affirmative verdict, and the authority will expend low investigative effort. Good and bad managers will obtain relief under adverse market conditions. This is preferred by good managers, as they do not have to separate by sending a costly signal.

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Section: Discussionmentioning

confidence: 99%

Endogenous Obfuscation in Injury Investigations

Hartigan

2002

Economica

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“…49 Government subsidies would be an example. 50 Kohler and Moore (2001) show in a model with asymmetric information about costs that the safeguard clause leads to under-adjustment.…”

Section: A the Motives Behind Trade Policy Flexibilitymentioning

confidence: 99%

Antidumping Reform, Trade Policy Flexibility, and Compensation

Roitinger

2002

SSRN Journal

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Antidumping has become the dominant instrument for temporarily restricting imports.There is need for concern, as it represents a particularly distorting trade policy measure.Many observers have made suggestions on how to improve the current situation. These suggestions aim at restraining antidumping by reducing the number of circumstances where it may be applied. In other words, they envisage higher prerequisites for the use of antidumping. Yet, higher prerequisites for temporary import restrictions impair the government's trade policy flexibility. This article assumes that governments are not ready to sacrifice such flexibility by means of an international trade agreement. Therefore, suggestions that merely intend to raise the prerequisites for the use of antidumping are difficult to realise. We propose an alternative solution for antidumping reform. It considers abolishing antidumping and introducing a revised safeguard clause. This clause would permit temporary import restrictions without any prerequisites, but would make these restrictions dependent on full compensation for affected trading partners. In contrast to existing suggestions for reform, this alternative solution preserves the trade policy flexibility provided by the current antidumping regime, but effectively restrains protectionist behaviour.

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“…9 See, for example, Lapham and Ware (2001) and Kohler and Moore (2001). 10 Trebilcock and Howse (1999, p. 232).…”

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confidence: 99%

An Evaluation of Japan's First Safeguards Actions

Kuno¹

2006

World Economy

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Japan has been one of the major GATT/WTO member countries with relatively little experience in implementing protectionist measures. However, in April 2001, for the first time in its history, Japan invoked provisional safeguard measures against imports of Welsh onions, Shiitake mushrooms and Tatami mats mainly from China. This paper reviews and evaluates the chain of events regarding these safeguard actions, and considers the means by which Japan might be able to deal with its 'trilemma' policy problem involving how to coordinate the promotion of trade liberalisation, the administration of WTO-consistent safeguards and responses to domestic political demands for protection. The paper first attempts to review the theoretical rationale for implementing safeguard measures and counterarguments against these measures. Second, it discusses the economic circumstances in which Japan implemented the safeguard measures and evaluates these measures critically from the standpoint of economic efficiency and the political economy interests involved. Finally, it concludes with a recommendation that the aforementioned 'trilemma' policy problem in Japan can be best addressed by means of the introduction of a 'well-institutionalised' domestic programme to provide adjustment assistance to ameliorate the displacement resulting from import surges. Copyright 2006 The Author Journal compilation 2006 Blackwell Publishing Ltd .

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The Safeguard Clause, Asymmetric Information, and Endogenous Protection

Cited by 5 publications

References 14 publications

Endogenous Obfuscation in Injury Investigations

Endogenous Obfuscation in Injury Investigations

Antidumping Reform, Trade Policy Flexibility, and Compensation

An Evaluation of Japan's First Safeguards Actions

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