FISHING DOWNSTREAM - THE POLITICAL-ECONOMY OF EFFECTIVE ADMINISTERED PROTECTION

It is common knowledge that consuming (downstream) industries are harmed by import barriers placed on primary or intermediate (upstream) products. We empirically examine the natural result of these forces: the flow of protection, winding its way downstream. After first discussing the effects of upstream protection on the supply and demand for protection downstream, we examine recent trends in U.S. antidumping and countervailing duty cases in two major industry sectors, metals and chemicals, which between them filed more than 70 per cent of all such cases. In both chemicals and metals, the tendency for upstream import protection to spread downstream is observed.