Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform

This paper is the first to use product-level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political-economic pressure. We focus on the case of India, a country that underwent a major exogenous ta...

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Main Authors:	Bown, Chad P., Tovar, Patricia
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Trade Policy International Trade Organizations F130 International Linkages to Development Role of International Organizations O190 Development Planning and Policy: Trade Policy Factor Movement Foreign Exchange Policy O240
Online Access:	http://hdl.handle.net/10986/5444

id	okr-10986-5444
recordtype	oai_dc
spelling	okr-10986-54442021-04-23T14:02:22Z Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform Bown, Chad P. Tovar, Patricia Trade Policy International Trade Organizations F130 International Linkages to Development Role of International Organizations O190 Development Planning and Policy: Trade Policy Factor Movement Foreign Exchange Policy O240 This paper is the first to use product-level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political-economic pressure. We focus on the case of India, a country that underwent a major exogenous tariff reform program in the early 1990s and subsequently initiated substantial use of safeguard and antidumping import restrictions. We first estimate structural determinants of India's import protection using the Grossman and Helpman (1994) model and provide evidence from its pre-reform tariff data of 1990 that is consistent with the theory. We then re-estimate the model on the Indian tariff data after the trade liberalization is complete and find that the model no longer fits, a result consistent with theory and evidence provided in other settings that India's 1991-1992 IMF arrangement can be interpreted as resulting in an exogenous shock to India's tariff policy. However, when we re-estimate the model on data from 2000-2002 that more completely reflects India's cross-product variation in import protection by including both its post-reform tariffs and its additional non-tariff barriers of antidumping and safeguard import protection, the significance of the Grossman and Helpman model determinant estimates is restored. We interpret these combined results as evidence that India unwound its commitment to reduce tariffs through use of antidumping and safeguard protection in the face of political-economic pressure. The estimates are also economically important and provide one explanation for separate results in the literature that the magnitude of import reduction associated with India's use of antidumping is similar to the initial import expansion associated with its tariff reform. Finally, we interpret the implications of our results for the burgeoning research literature examining the effects of liberalization on India's micro-level development. 2012-03-30T07:32:51Z 2012-03-30T07:32:51Z 2011 Journal Article Journal of Development Economics 03043878 http://hdl.handle.net/10986/5444 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Trade Policy International Trade Organizations F130 International Linkages to Development Role of International Organizations O190 Development Planning and Policy: Trade Policy Factor Movement Foreign Exchange Policy O240
spellingShingle	Trade Policy International Trade Organizations F130 International Linkages to Development Role of International Organizations O190 Development Planning and Policy: Trade Policy Factor Movement Foreign Exchange Policy O240 Bown, Chad P. Tovar, Patricia Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper is the first to use product-level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political-economic pressure. We focus on the case of India, a country that underwent a major exogenous tariff reform program in the early 1990s and subsequently initiated substantial use of safeguard and antidumping import restrictions. We first estimate structural determinants of India's import protection using the Grossman and Helpman (1994) model and provide evidence from its pre-reform tariff data of 1990 that is consistent with the theory. We then re-estimate the model on the Indian tariff data after the trade liberalization is complete and find that the model no longer fits, a result consistent with theory and evidence provided in other settings that India's 1991-1992 IMF arrangement can be interpreted as resulting in an exogenous shock to India's tariff policy. However, when we re-estimate the model on data from 2000-2002 that more completely reflects India's cross-product variation in import protection by including both its post-reform tariffs and its additional non-tariff barriers of antidumping and safeguard import protection, the significance of the Grossman and Helpman model determinant estimates is restored. We interpret these combined results as evidence that India unwound its commitment to reduce tariffs through use of antidumping and safeguard protection in the face of political-economic pressure. The estimates are also economically important and provide one explanation for separate results in the literature that the magnitude of import reduction associated with India's use of antidumping is similar to the initial import expansion associated with its tariff reform. Finally, we interpret the implications of our results for the burgeoning research literature examining the effects of liberalization on India's micro-level development.
format	Journal Article
author	Bown, Chad P. Tovar, Patricia
author_facet	Bown, Chad P. Tovar, Patricia
author_sort	Bown, Chad P.
title	Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
title_short	Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
title_full	Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
title_fullStr	Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
title_full_unstemmed	Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
title_sort	trade liberalization, antidumping, and safeguards: evidence from india's tariff reform
publishDate	2012
url	http://hdl.handle.net/10986/5444
_version_	1764395075156049920

Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform

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