Why can’t countervailing duties deter export subsidization?

Research output: Journal PublicationsJournal Article (refereed)

11 Citations (Scopus)

Abstract

This paper shows that in a duopoly model of international market competition, threatened imposition of countervailing duties by a domestic country generally deters a foreign country from subsidizing its exports to the former. To explain the coexistence of export subsidization and the GATT-conform countervailing duty measures, factors such as delay in retaliation, the GATT constraint on the amount of countervailing duties, and voluntary export restraints must be considered. We find that these factors lessen the efficacy of countervailing duty retaliation and therefore fail to deter export subsidization.
Original languageEnglish
Pages (from-to)249-272
Number of pages24
JournalJournal of International Economics
Volume39
Issue number3-4
DOIs
Publication statusPublished - Nov 1995
Externally publishedYes

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Keywords

  • Strategic export subsidy
  • Retaliation
  • Countervailing duties
  • Voluntary export restraints

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