Do Exporters Gain From Voluntary Export Restraints

The results of the model developed here are a strong indictment of VERs. For most plausible parameter values, VERs redirect exports, reduce the size of industries for which countries have comparative advantage, and cause overall economic losses -- especially if the affected industry is large in the market for its factors of production.

By reducing the marginal revenue of the factors of production , a voluntary export restraint (VER) causes an exporting country's industry to contract. Efficiency losses depend on whether sales can be diverted from restricted to unrestricted markets. A VER is likely to produce a welfare loss if demand is relatively elastic and supply is not.

Differences in the choices of trade and macro policies, both by developing countries and by developed countries towards developing countries, have been critical in determining the overall performance of developing countries. All too often, the performance of developing countries has not been assessed using appropriately conducted studies. The papers in this book are chosen to bridge this gap and show how a quantitative approach to policy evaluation can help resolve controversies and explain the choice of observed policies.The book brings together carefully selected papers that assess the impacts of various trade and macro policies, by quantifying the policies of developing countries at the macro level (exchange rate, investment, savings) and at the sector level (trade and industrial policies), in addition to policies of developed countries towards developing countries (trade preferences, quotas, VERs and migration policies). Facets of the political economy of trade, migration, and climate policies are explored (such as the enlargement of the EU, the rise of regionalism and how it can ease the pains of adjustment to trade liberalization, openness and inequality). Growing tensions between trade and the environment are also investigated. In short, this book covers a wide area of events ranging from external and internal shocks to external and internal policies, showing how the consequences of these events can be brought to rigorous quantitative analysis.

The initial leaps forward in international trade liberalisation were achieved under the auspices of the General Agreement on Tariffs and Trade (GATT) when trade barriers in the form of tariffs were significantly reduced or removed up until the mid-1970s. However, this advancement was counteracted by a «new protectionism» which surfaced in the oil crises and the subsequent world economic recession. The term «new» was not to indicate the novelty of protectionist tendencies regaining momentum, but instead referred to the ever more subtle instruments, deploying non-tariff barriers to trade. Among these «grey area» measures (to use GATT parlance) are the voluntary export restraints (VERs) which unfolded insidiously over the years. Whereas the proliferation of VERs has attracted abundant economic studies and political debate, it found only limited legal discussion. Despite their outright ban in the Uruguay Round (when VERs were outlawed by the Agreement on Safeguards), the rare instances where VERs have actually been challenged is clearly unrepresentative of their propagation. The aim of this thesis is to elaborate on the popularity of VERs, to examine the lack of judicial consideration afforded to them, expanding therefore on the intersection of international trade regulation with competition law, economics and international political economy.

Non-Tariff Barriers, Regionalism and Poverty is a collection of key articles in three important areas of applied international trade research: measuring non-tariff barriers and their effects, the consequences of regional trading arrangements, especially on the countries excluded from them, and the connection between international trade and poverty. Drawing from 30 years of research and experience, L Alan Winters illustrates the development of techniques of this field and his continued commitment to answering real policy questions at the times at which they are debated. The collection shows the ways in which economic and econometric analysis can be used to answer real-world problems rigorously in the area of international trade and trade policy. Readers will find that some of the research included is of current methodological relevance and some of more historical significance. This volume is invaluable to anyone who is keen on developing their knowledge on trade policy, regionalism or poverty — three pressing issues in today's globalized world. Contents:IntroductionNon-Tariff Barriers:The Extent of Nontariff Barriers to Industrial Countries' Imports (with JJ Nogués and A Olechowski)Do Exporters Gain from VERs? (with J de Melo)Labour Adjustment Costs and British Footwear Protection (with WE Takacs)Voluntary Export Restraints and Rationing: U.K. Leather Footwear Imports from Eastern Europe (with PA Brenton)VERs and Expectations: Extensions and EvidenceDigging for Victory: Agricultural Policy and National SecurityRegionalism:Separability and the Specification of Foreign Trade FunctionsBritish Imports of Manufactures and the Common MarketRegionalism and the Rest of the World: The Irrelevance of the Kemp-Wan TheoremHow Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR (with W Chang)Trade and Economic Geography: The Impact of EEC Accession on the UK (with HG Overman)Trade and Poverty:Trade Liberalisation and Poverty: What are the Links?Trade Liberalization and Poverty: The Evidence So Far (with N McCulloch and A McKay)Trade Liberalisation and Economic Performance: An OverviewTrade Liberalisation and Poverty Dynamics in Vietnam (with Y Niimi and P Vasudeva Dutta)Agricultural Trade Liberalization and Poverty Dynamics in Three Developing Countries (with J Litchfield and N McCulloch)Why Isn't the Doha Development Agenda More Poverty Friendly? (with TW Hertel, R Keeney, and M Ivanic)Trade as an Engine of Creative Destruction: Mexican Experience with Chinese Competition (with L Iacovone and F Rauch) Readership: Undergraduates, research students and professionals interested in macroeconomics; international trade practitioners. Key Features:Shows the ways in which economic and econometric analysis can be used to answer real-world problems rigorously in the area of international trade and trade policyThe broad collection of applied work on trade illustrates problems and analyses that others may find a useful base for their own workKeywords:International Trade;Poverty;Regional Trading Arrangements (RTAs);Trade Barriers;Non-Tariff Barriers