Author Archives: jdingel

How the Journal of International Economics works

Ivan Cherkashin, Svetlana Demidova, Susumu Imai, and Kala Krishna got their hands on the 3,032 submissions sent to the Journal of International Economics between 1995 and 2004. The product is a NBER working paper on how the journal operates.

We learn that the acceptance rate is around twenty percent, but falling fast. And non-native English speakers have more difficulty publishing. These interesting tidbits are scattered throughout the paper.

An obvious trend is the decrease in the share of submissions from the authors affiliated with the US universities from 50% in 1995 to 37% in 2004 and a corresponding increase in such number for researchers from the European universities from 12% to 28%, suggesting that at least in International Economics, the US may well be losing ground.

I should note that the bottom line is that the JIE does a pretty good job.

Impotent policy proposals

Dean Baker says tax incentives like the Patriot Employer Act can’t stem offshoring:

My reason for saying that the tax code is largely irrelevant to firms’ decisions to move jobs overseas is that any tax preferences tend to be a very small factor in location decisions. Firms ship jobs overseas because they can pay workers $1 an hour, instead of $20 an hour in the U.S. They are some quirks here and there in the tax code that can provide frosting for firms that ship jobs overseas, but there are also quirks that encourage them to keep jobs here.

Zeroing loses again

FT:

A method known as “zeroing” used by the US in anti-dumping investigations and reviews was slapped down on Wednesday by the top court of the World Trade Organisation.

In a case brought by Mexico against punitive US duties on imports of Mexican steel, the WTO’s appellate body ruled that zeroing was illegal in all types of anti-dumping action. It was the latest in a series of similar rulings against Washington.

The issue has set the US against the rest of the 151-strong WTO membership in the Doha global trade talks, where Washington is pushing for zeroing to be legitimised in changes to anti-dumping rules.

It has also sparked a debate over the role of the appellate body, which the US claims is making rather than interpreting WTO rules. Thus the dispute panel that first considered Mexico’s complaint argued that current rules did permit zeroing in some circumstances, flouting an earlier appeals ruling. The panel’s decision has now been struck down.

Washington on Tuesday responded angrily, accusing the appellate body of over-reach “by inventing new obligations” and of undermining the proper functioning of the dispute settlement system.

Boston Tea Party: Protectionist sabotage

The Townshend Act forbade the [East India] Company frrom selling its goods directly to the colonists. Instead, the EIC had to auction merchandise to middlemen, who then shipped the caragoes to American wholeslaers, who finally sold to local shop owners. In May 1773, Parliament, at the request of the EIC, passed the Tea Act. It imposed no new taxes, but rather allowed the Company, for the first time, to import tea directly from Asia into America. The act cut the price of tea in half and was therefore a boon to colonial consumers.

The middlemen cut out by the act, local smugglers and tea merchants, were not as happy… In November 1773, the East Indiamen Dartmouth, Beaver, and Eleanor entered Boston Harbor with the fisrt loads of the EIC’s tea. The conspirators, probably led by Samuel Adams, were well prepared and highly disciplined: they cleaned the decks when they were finished and took no tea for personal use or later sale.

— William Bernstein, A Splendid Exchange: How Trade Shaped the World, 2008, p.242

HT: EconTalk

Chinese exports and American inequality

A new working paper pdf on Christian Broda’s website, joint with John Romalis:

Over the past three decades there has been a spectacular rise in income inequality as measured by
official statistics. In this paper we revisit the distributional consequences of increased imports
from China by looking at the compositional differences in the basket of goods consumed by the
poor and the rich in America. Using household data on non-durable consumption between 1994
and 2005 we document that much of the rise of income inequality has been offset by a relative
decline in the price index of the poor. By relaxing the standard assumptions underlying the
representative agent framework we find that inflation for households in the lowest tenth
percentile of income has been 6 percentage points smaller than inflation for the upper tenth
percentile over this period. The lower inflation at low income levels can be explained by three
factors: 1) The poor consume a higher share of non-durable goods —whose prices have fallen
relative to services over this period; 2) the prices of the set of non-durable goods consumed by
the poor has fallen relative to that of the rich; and 3) a higher proportion of the new goods are
purchased by the poor. We examine the role played by Chinese exports in explaining the lower
inflation of the poor. Since Chinese exports are concentrated in low-quality non-durable products
that are heavily purchased by poorer Americans, we find that about one third of the relative price
drops faced by the poor are associated with rising Chinese imports.

Erm, but that’s “preliminary and incomplete,” so “please don’t circulate” it. (The internet is a funny place.)

[HT: MR]

Uncollected anti-dumping duties

GAO reports:

U.S. Customs and Border Protection (CBP) has been unable to collect hundreds of millions of dollars in antidumping (AD) and countervailing (CV) duties. The Department of Commerce imposes these duties to remedy injurious unfair foreign trade practices (unfairly low prices or subsidies). The noncollection of AD/CV duties means that the U.S. government has not fully remedied the unfair trade practices and bears a substantial loss of revenue…

While over $600 million in AD/CV duties dating back to 2001 remain uncollected, they are highly concentrated among a few products, countries of origin, and importers… [A] relatively small number of importers owe the vast majority of these uncollected duties… According to CBP officials, prospects for collecting a sizeable portion of these bills are slim, because many of the importers have disappeared, have no assets, or have declared bankruptcy…

Four key factors contribute to uncollected AD/CV duties… First, because the U.S. AD/CV duty system involves the retrospective assessment of duties, the final amount of AD/CV duties an importer owes can significantly exceed the initial amount paid when the goods entered the country. Second, companies that did not previously export products subject to AD/CV duties, i.e., “new shippers,” pose two types of risks for collections. For example, new shippers can be assigned an AD/CV duty rate based on as few as one shipment, which can significantly underestimate the final duty rate… Third, all importers must provide a general bond to secure the payment of all types of duties, but CBP’s standard practice for setting the amount of this bond inadequately protects AD/CV duty revenue… Fourth, CBP collects minimal information regarding importers and does not conduct background or financial checks, which creates challenges to locating importers and collecting AD/CV duties.

What should we be paying more for? “Approximately 84 percent of the total amount of uncollected AD/CV duties is associated with four products, all from China: crawfish tail meat, garlic, honey, and mushrooms.”

I can’t say I’m too upset.

[HT: H&R]