Policy Liberalization and US Merchandise Trade Growth, 1980-2006

131 Pages Posted: 14 May 2009 Last revised: 4 Apr 2010

See all articles by Gary Clyde Hufbauer

Gary Clyde Hufbauer

Peter G. Peterson Institute for International Economics; Institute for International Economics

Matthew B. Adler

Peterson Institute for International Economics

Date Written: May 11, 2009

Abstract

This working paper draws on historical and contemporary data on tariffs, non tariff barriers, and transportation costs (for the United States and its major trading partners) to estimate the role of policy liberalization in US merchandise trade growth over the period 1980 to 2006. Both partial equilibrium analysis and computable general equilibrium analysis are used to make the estimates. Both methods indicate that roughly 25 percent of US trade growth since 1980 can be attributed to policy liberalization. Policy liberalization plays a larger role in US export growth (35 to 40 percent) than US import growth (25 percent). According to these estimates, policy liberalization accounts for almost all US merchandise growth in excess of growth that can be explained by expanding GDP in the United States and abroad.

Keywords: International trade, policy liberalization, tariff liberalization, nontariff barriers, transportation costs

JEL Classification: F1, F13, F15, F17, C68

Suggested Citation

Hufbauer, Gary Clyde and Adler, Matthew B., Policy Liberalization and US Merchandise Trade Growth, 1980-2006 (May 11, 2009). Peterson Institute for International Economics Working Paper No. 09-2, Available at SSRN: https://ssrn.com/abstract=1404680 or http://dx.doi.org/10.2139/ssrn.1404680

Gary Clyde Hufbauer (Contact Author)

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036-1903
United States

Matthew B. Adler

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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