Publication Number: 3701

Report Title: The Economic Effects of Significant U.S. Import Restraints, 4th Update 2004

Investigation Number: 332-325

Author's name(s): Soamiely Andriamananjara, Marinos Tsigas

Date Published: June 2004

Report Description/Introductory Text: USITC economic assessment of the impact of significant U.S. import restraints on U.S. firms, workers, and consumers and on the net economic welfare of the United States. The USITC report provides an assessment of the effects of liberalizing trade barriers in all U.S. sectors covered by significant import restraints.

In this report, the U.S. International Trade Commission (USITC) assesses the impact of significant U.S. import restraints on U.S. firms, workers, and consumers and the net economic welfare of the United States. The USTR request underlying this series of reports seeks to have USITC analyze the economic effects of removing certain tariffs, tariff-rate quotas, or other measures affecting U.S. imports. Neither the request nor this report addresses non-economic considerations. Nothing in the report should therefore be construed as commentary on the legality of any measure covered in the text or modeling or on the policies underlying such measures.

In order to analyze the economic effects of significant import restraints, two approaches are used in this report: a quantitative, model-based approach for those portions of the economy and those economic restraints that are suitable for such analysis; and a qualitative, analytical approach for those cases that do not lend themselves to such quantitative methodologies. USITC’s quantitative analysis finds that removal of significant quantifiable restraints to trade in the form of high tariffs and significantly binding non-tariff barriers would lead to a net increase in economic welfare of about $14 billion for the U.S. economy. Consistent with previous updates of this report, the largest effect is in the individual liberalization of textiles and apparel. Liberalization of sugar and footwear and leather products would also generate significant welfare gains. Economic theory and analysis suggest that removal of the non-quantifiable barriers identified in the report could well lead to additional economic benefits; but while such potential gains might be identified and characterized, their exact values remain speculative until data and modeling needs necessary for reliable quantitative analysis are developed.

This report is the fourth update in a series that was initiated in1992 in response to a letter from the United States Trade Representative (USTR) requesting an investigation under section 332(g) of the Tariff Act of 1930.

Topics Covered: USITC economic assessment, import restraint, tariffs, tariff-rate quota, trade barriers, trade liberalization

Countries: United States

Click here for full report