Working Paper: CEPR ID: DP404
Authors: L. Alan Winters
Abstract: The EC policy of import surveillance entails the public announcement that henceforth the Commission will collect detailed statistics on particular import flows. The imposition of surveillance, it is argued, will change exporters' perceptions about the probabilities of future import controls. When it anticipates future restrictions, a competitive export industry is likely to increase sales as each firm tries to gain a higher share of any future quota, but an oligopolistic industry may well curtail exports in the hope of avoiding further, more restrictive policy. This paper tests these hypotheses on EC import data and finds them largely supported. It argues that this result constitutes evidence of strategic behaviour.
Keywords: import surveillance; strategic trade policy; EC imports
JEL Codes: 421; 422
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Imposition of import surveillance (F13) | Strategic response from exporters (F10) |
| Strategic response from exporters (F10) | Alter export behavior based on expectations of future import restrictions (F10) |
| Competitive export industries (F14) | Increase sales in anticipation of future quotas (L21) |
| Oligopolistic industries (L13) | Reduce exports to avoid stricter controls (F10) |
| Import surveillance (F14) | Reduced import volumes and market shares for surveyed countries (F14) |
| Import surveillance (F14) | Declining market shares and rising unit values of imports (F14) |
| Indirect effects on exporters' perceptions (F69) | Influence trade flows (F14) |