Economic analysis of unfair trade practices and its injury

Yi Sheng, Fordham University

Abstract

In recent years U.S. Trade policy has focused on issues of fairness. The phenomenon of unfair trade practices, including dumping and subsidization of industries by foreign governments, has increased the belief that these unfair trade practices have injured American industries. Unfair trade is a term that surfaces frequently in debates surrounding trade friction, despite there being no consensus of opinion on its definition. The focus of unfair trade laws lies increasingly on protecting any U.S. product that might be displaced by import competition.^ This dissertation examines the relationship of unfairly traded imports and their injury to U.S. industries and how the existing legislation and the International Trade Commission's decision affect the criteria of unfair trade practices. Moreover, it fulfills the need for more comprehensive empirical research by applying constructed models and utilizing causation tests; we then solve them through empirical estimations in order to discover the effects on U.S. industries of imports versus shifts in domestic demand and supply and there by determine whether imports are 'a substantial cause' of injury as required by the U.S. trade laws. The primary empirical analyses focus on the effects of imports on the U.S. footwear industry adjudicated by the International Trade Commission under the escape clause, Section 201 of the Trade Act of 1974.^ The results of this dissertation suggest that employment opportunities of U.S. industries competing with imports are not severely injured by imports. However there can be serious repercussions within industries as a result of competition from abroad. In the case of the U.S. footwear industry competing with imports, injuries are found in comparison with domestic development. i.e., increase in income and wages. The changes in import prices have significant effects on both employment and wages, which imply that low-priced imports and the higher cost of domestic workers are major concerns for the declining industries. ^

Subject Area

Economics, General|Political Science, International Law and Relations

Recommended Citation

Yi Sheng, "Economic analysis of unfair trade practices and its injury" (January 1, 1998). ETD Collection for Fordham University. Paper AAI9816351.
http://fordham.bepress.com/dissertations/AAI9816351

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