Many feared a return of 1930s-style protectionism when recession hit the global economy. But many countries avoided this. In a blog post, co-authored with Meredith Crowley, I focus on US and EU trade policy and discuss how this policy withstood the ‘Great Recession.’ The following is an excerpt from the post which appeared on Vox.
“During the Great Recession, import protection increased around the world (Evenett, 2011). Popular policies included antidumping tariffs, safeguards, and other temporary trade barriers (Bown 2011a,b). Despite this, for high-income economies such as the US and EU, such trade barriers increased much less than initially feared. In this column, we ask how and why.
High-income economies have low applied import tariffs that are both bound under the WTO and that change infrequently. In response to economic shocks, these economies instead turn to other trade policies such as antidumping tariffs, safeguards, and countervailing duties – here referred to collectively as temporary trade barriers – to implement any new import restrictions. In recent research (Bown and Crowley 2012) we use quarterly data for the US, EU, and three other industrialised economies to estimate the impact of macroeconomic fluctuations on these trade policies for different periods dating back to the 1980s, including through the end of 2010:Q4. These estimates inform our assessment of trade protection during the Great Recession1." Read the full post here.
1Prusa (2011) and Vandenbussche and Viegelahn (2011) present extensive, micro-level analysis of the US and EU use of antidumping during this period.