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WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.

English

Reassessing Effective Protection Rates in a Trade in Tasks Perspective

Evolution of Trade Policy in "Factory Asia"

With international trade moving from "trade in (final) goods" to "trade in tasks", effective protection rates (EPRs) are back to the stage, allowing us to measure the overall protection of a product or sector by including the production structure and the origin of the inputs -domestic or imported. Input-output matrices are used in this paper to monitor the production structure of 10 Asian-Pacific countries between 1995 and 2005, and to calculate sectorial EPRs. The paper proposes a series of counter-factual simulation methods aimed at isolating the specific contribution of changes in tariff policies, in production structure or in real exchange rates. Working on international input output matrices allowed also to compute and compare the average propagation length of a cost-push linked to a sudden change in tariff duties, identifying those sectors that are the most deeply interconnected, both in the intensity and in the length of their inter-industrial foreign relationships.

English

Keywords: Effective Protection, Tariff, Trade in Value Added, International Outsourcing, Asian Input-Output
JEL: F23: International Economics / International Factor Movements and International Business / Multinational Firms; International Business; F13: International Economics / Trade / Trade Policy; International Trade Organizations
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