forthcoming, Journal of International Economics Trade Disputes and the Implementation of Protection under the GATT: An Empirical Assessment Chad P. Bown †,‡ Department of Economics and Graduate School of International Economics and Finance Brandeis University Original Version: November 2000 This Version : June 2002 Abstract This paper is a first attempt to empirically determine why countries choose to violate or adhere to GATT rules when making trade policy adjustments between negoti- ating rounds. We use a previously unexploited set of data in which countries implemented two ‘types’ of protection under the GATT system between 1973-1994: (i) ‘legal’ protection in which countries utilized the GATT’s safeguards provisions, and (ii) ‘illegal’ protection in which the protection was provided outside of the safeguards provisions, resulting in a formal trade dispute. We find substantial evidence that concerns for retaliation affect government policy decisions in ways which contribute to the explanation of the existence of trade disputes. JEL No. F13 Keywords: Tariff Retaliation, GATT/WTO, Trade Disputes, Reciprocity † correspondence: Department of Economics, MS 021, Brandeis University, Waltham, MA 02454-9110 USA tel: (781) 736-4823, fax: (781) 736-2269, email: [email protected], web: http://www.brandeis.edu/˜cbown/ † Thanks to two anonymous referees for comments that have substantially improved the presentation of this paper. All remaining errors are my own.
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