TDPE Seminar Series Presents: Chad Brown (The World Bank)

Global Supply Chains and Trade Policy

Chad P. Bown, The World Bank & CEPR (joint with Emily J. Blanchard and Robert C. Johnson)

How do global supply chain linkages modify countries incentives to impose import protection? Are these linkages empirically important determinants of tariffs and other policy barriers to trade? To answer these questions, we integrate supply chain linkages into the terms-of-trade model of trade policy, and we develop testable predictions that relate observed bilateral final goods tariffs to domestic and foreign value added content. We test the predictions using a new database of bilateral applied tariffs and value added content derived from global input-output tables for 14 major economies and 15 sectors over the 1995-2009 period. We find that both domestic content in foreign final goods production and foreign content in domestic final goods production lower bilateral tariffs on final goods imports, consistent with the theory. These results hold for anti-dumping duties and other temporary trade barriers as well.

Chad P. Bown is a Lead Economist at the World Bank in Washington, DC and a Research Fellow at CEPR in London. At the World Bank, Chad conducts research and advises governments on international trade policy as part of the Trade and International Integration (DECTI) team in the Development Research Group. Bown serves on the editorial boards of Economics & Politics, Journal of International Economics, Journal of International Economic Law, Journal of World Trade, Review of International Organizations, and World Trade Review. Bown’s research interests include the political economy of international trade laws and institutions, trade policy negotiations, and trade disputes, and his work has been published in journals such as The American Economic Review, The Review of Economics and Statistics, Journal of International Economics, and Journal of Development Economics

Open to the Public

Sponsored by Trade Development and Political Economy at the Moynihan Institute of Global Affairs.