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Politicized Trade: What Drives Withdrawal of Trade Preferences?

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Abstract

While it is well understood that industrialized countries use aid to grantpolitical favors, little research covers alternative channels such as trade policytowards developing countries. We analyze eligibility investigations and revokingof U.S. Generalized System of Preferences (GSP) benefits to see whetherpolitical friends of the U.S. receive favorable treatment. While countries politicallyaligned with the U.S. are equally likely to be investigated, they aresignificantly less likely to have their benefits suspended.

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  • Martin Gassebner & Arevik Gnutzmann-Mkrtchyan, 2017. "Politicized Trade: What Drives Withdrawal of Trade Preferences?," KOF Working papers 17-435, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:17-435
    DOI: 10.3929/ethz-b-000213817
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    1. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
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    Cited by:

    1. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2019. "Foreign in influence and domestic policy: A survey," Cambridge Working Papers in Economics 1928, Faculty of Economics, University of Cambridge.
    2. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
    3. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik, 2020. "The Impact of Trade Preferences Removal," Hannover Economic Papers (HEP) dp-663, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Stephan Schneider & Sven Kunze, 2021. "Disastrous Discretion: Ambiguous Decision Situations Foster Political Favoritism," KOF Working papers 21-491, KOF Swiss Economic Institute, ETH Zurich.
    5. Hinnerk Gnutzmann & Arevik Gnutzmann‐Mkrtchyan, 2022. "The impact of trade preferences removal: Evidence from the Belarus Generalized System of Preferences withdrawal," The World Economy, Wiley Blackwell, vol. 45(9), pages 2977-3000, September.
    6. Gnutzmann-Mkrtchyan, Arevik & Volmer, Maximilian, 2022. "EU trade policy reform: towards reciprocal concessions with developing countries," Hannover Economic Papers (HEP) dp-697, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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    More about this item

    Keywords

    Keywords: Development; Trade Policy; United Nations General Assembly;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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