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Policy and politics: Trade adjustment assistance in the crossfire

Author

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  • Christopher Laincz
  • Xenia Matschke
  • Yoto V. Yotov

Abstract

At a time when trade and globalization are subject to extremely polarized political debates, we study the interplay between politics and the certification outcome of trade adjustment assistance (TAA), a US national policy meant to buffer the domestic labour market from adverse effects of increased international trade. To this end, we capitalize on the unique design, implementation and detailed data collection efforts of the US TAA program. We employ a rich multi‐dimensional data set to quantify the effects of political influence on the TAA certification process, controlling for a variety of fixed effects, in particular at the industry level. We find that political factors such as party affiliation of the president, congressional voting outcomes at the state and district levels and whether a petition was filed in a presidential election year influence the TAA certification probability as well as the decision time. Législation et politique : l'aide à l'ajustement commercial pris entre deux feux. À l'heure où le commerce et la mondialisation font l'objet de débats politiques extrêmement polarisés, nous nous intéressons à l'interaction entre la politique et l'aboutissement d'une certification au plan d'aide aux rajustements commerciaux, une politique nationale américaine visant à protéger le marché national du travail des répercussions négatives liées à l'essor du commerce international. À cette fin, nous nous appuyons sur la conception singulière, la mise en œuvre et le recueil de données détaillées du Programme d'aide à l'ajustement commercial des États‐Unis (PAAC). Pour mesurer les répercussions de l'influence de la politique sur le processus de certification du PAAC, nous utilisons un ensemble de données multidimensionnel important tenant compte d'un ensemble d'effets fixes, notamment au niveau sectoriel. Nous constatons qu'un certain nombre de facteurs politiques, notamment l'affiliation politique du président, l'issue des votes parlementaires au niveau national et local ou le dépôt d'une pétition au cours d'une année d’élection présidentielle peut avoir une incidence sur la probabilité d'une certification ainsi que sur le calendrier décisionnel.

Suggested Citation

  • Christopher Laincz & Xenia Matschke & Yoto V. Yotov, 2021. "Policy and politics: Trade adjustment assistance in the crossfire," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 760-792, May.
    • Handle: RePEc:wly:canjec:v:54:y:2021:i:2:p:760-792
    DOI: 10.1111/caje.12504
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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