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3 Import Penetration, Comparative Advantage, and Industry Use of Trade RemediesTable 1 describes the frequency with which many of the US trade remedy laws and
programs have been used in recent years. In most cases, the “petitions” number indicates the number of industry-wide requests for US government intervention during the period indicated.
However, TAA for displaced workers shows the number of petitions from individual workers, while TAA for Firms shows the number of firms certified to receive benefits.
From the standpoint of the adjustment environment created by US trade remedies, it is relevant to know whether the workers, firms, and industries that request assistance under the various programs are the ones facing the greatest pressure to adjust to changing conditions in the international market. Also, relative to other US industries, is the revealed comparative advantage of “frequent users” of trade remedies declining over time? To address these questions, we refer to Table 2.
Table 2 provides a simple comparison of measures by industry of import-penetration
ratios and revealed compared advantage (RCA) for users versus non-users of some of these programs. Consider first the data on the mean and median industry-level import-penetration ratios for petitioning and non-petitioning industries. For each of the three programs in the table (safeguards, TAA, antidumping), we would expect petitioning industries to be associated with higher levels of import penetration than non-petitioners, as well as larger increases in import penetration over the last five years prior to the petition being filed. With the exception of the change in import penetration ratios for antidumping, that is exactly the qualitative pattern of results that we observe in the first two columns. The second two columns of Table 2 provide data on the industry-level RCA variables. For each of the three programs in the table, we would expect petitioning industries to be associated with lower levels of RCA than non-petitioners, as well as larger decreases over the last five years prior to the petition being filed. Again, the
qualitative pattern of the results, i.e., the means and median of the data for petitioning and nonpetitioning industries are consistent with that hypothesis.
We conclude from this rough empirical exercise that the industries that face, or should face, adjustment to changing global market conditions are more likely than other industries to seek help under the various trade remedies discussed above. Thus, the “adjustment environment” created by these laws may play a significant role in determining the speed of adjustment and also the cost of adjustment. In the next section we consider the case of textiles and apparel, a major recipient of import relief under several of these laws
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