Unprotective tariffs, ineffective liberalization, and other mysteries: an investigation of the endogenous dimensions of trade policy formation in Australia.1. IntroductionSince its formation as a federation in 1901, Australia embraced a fairly comprehensive tariff schedule in relation to imported manufactures. (1) Tariff rates fluctuated considerably over the years. However, over the course of the century they remained sufficiently high to earn Australian manufacturing the reputation of one of the most heavily protected manufacturing sectors in the industrialized world. (2) In recent years, a number of liberalization waves have surfaced. The most notable of these took place in 1973, 1977, 1988, 1991, and, most recently, in 1994, with the signing of the "Uruguay round" of the GATT agreement. Still, tariffs remain a principal actor in Australia's menu of industrial policies. In a recent edition of the annual report of the Productivity Commission, (3) published in November 1999, it is noted that although tariffs have dropped considerably since 1994 "they remain an important form of assistance ... tariff assistance still accounts for around 90% of measured effective assistance to the manufacturing sector" (4) (p. 52). Given the pervasiveness of Australian tariff policy, the significant welfare implications of changes in that policy and the particular importance of international trade for this country, ensuing from its idiomorphic cultural, resource-endowment, and geographic characteristics, (5) considerable research effort has been invested in the examination of various dimensions of this issue. At the forefront of pertinent empirical research, two items have attracted considerable interest: (1) the host of determinants of the highly dispersed tariff concessions and (2) the impact of liberalization on imports. Research that falls in the category that examines the former, including Anderson (1980), Conybeare (1984), Aislabie (1988), and Feaver and Wilson (1998), is consistent, at varying degrees, with the theory of endogenous trade policy formation. (6) According to the foundations of this theory, tariff concessions may be viewed as "public outcomes" that facilitate a political equilibrium. The mechanics are rather elementa ry. When the profit loss that arises from import competition exceeds the transaction cost of a successful lobbying campaign for protection, private interests will undertake such lobbying activities. The higher the loss from foreign competition, the more fervent the lobbying effort. Hence, an increase in import penetration is likely to trigger greater protection (7) (Trefler 1993, p. 139). Unlike this line of inquiry, the critical causal relationship of interest to studies that fall in the category that investigates item (2), including Simmons and Smith (1994), relates to the effects of tariff changes on imports, rather than the reverse. The causal directions of the nature examined by studies that investigate issues (1) and (2) are, of course, not mutually exclusive. Higher import penetration increases tariffs, and higher tariffs, in turn, decrease import penetration. However, despite the simultaneity of these variables, studies of Australia's trade policies associated with research lines (1) and (2) followed separate paths by only considering unidirectional causal relationships. (8) And yet, these paths do converge. The meeting point: perplexing results! On the one hand, studies of endogenous protection, such as Anderson (1980) and Aislabie (1988), have consistently failed to establish the expected result that an increase in import penetration will lead to higher tariffs. On the other, studies of trade liberalization often find that tariff reductions have a surprisingly small effect on imports, with a study by Simmons and Smith (1994) concluding that, at least in relation to the examined industry,"... removal of the tariff would have no effe ct on the level of imports..." (p.57). It is important to note that analogous, and equally puzzling, findings pertaining to improbably small effects of liberalization on imports have been identified in the case of other countries, such as the United States, by a number of authors. In a recent article, Trefier (1993)argued that the small magnitudes of related estimates in the case of the United States derive from methodologies that ignore the political economy of trade policy formation. This author showed that, when the level of protection is modeled endogenously, the relevant estimates are altered considerably. In the context of the existing pertinent literature, the present article constitutes the first attempt to model the determination of imports and tariffs relevant to the Australian manufacturing sector simultaneously. This exercise has three distinct objectives: First, implementation of the proposed methodology will shed light on relevant dimensions of endogenously determined tariff concessions while independently accounting for important "feedback" effects that have been ignored by similar studies. Second, extending Trefler's (1993) analysis, my model will explore the degree to which the scale of misspecification inherent in previous studies that investigate research line (2) may have been responsible for their unsettling results. Last, and most important, the proposed framework of analysis will augment the scope of inquiry adopted by previous contributions in this area by investigating whether findings regarding the impact of import penetration on protection that are derived using single equation techniques, and which are incongruous with the predictions of endogenous trade theory, may be appropriately rehabilitated in a simultaneous equation setting. The remainder of the article is organized as follows. The model is examined in the next section. In section 3, issues of econometric implementation and the empirical results are discussed. Concluding remarks are reserved for section 4. 2. The Model Single-equation regression techniques "entangle" reciprocal causal flows that link trade barriers with trade volumes. To extricate distinct dimensions of this relationship, Ray (1981b) proposed a simultaneous equation approach, which was subsequendy adopted by Trefler (1993) and Lee and Swagel (1997). The first two studies explored endogenous trade policy formation in the United States, whereas the latter relied on cross-country observations. However, all three implementations of this analytical framework used limited-depended-variable formulations to investigate the joint determination of nontariff barriers (NTBs) and imports. (9) In the present article, I introduce a continuous-variable interpretation of the analytical framework pioneered by Ray (1981b) to investigate the simultaneous determination of import penetration and tariffs in Australia. The system of equations that are jointly estimated is given by T = [[alpha].sub.T] + [[beta].sub.M] X M + [c'.sub.T] X [X.sub.T] + [[epsilon].sub.T] (1) M = [[alpha].sub.M] + [[beta].sub.T] X T + [c'.sub.M] X [X.sub.M] + [[epsilon].sub.M]. (2) These equations represent a cross-sectional characterization of the Australian manufacturing sector. T denotes the nominal tariff that corresponds to the level of protection granted to an industry that faces a level of import penetration given by M; [X.sub.T] and [X.sub.M] represent vectors of industry characteristics that determine tariff concessions and the demand for imports, respectively; and a' = [[alpha].sub.T], [[alpha].sub.M]] and e' [[epsilon].sub.T], [[epsilon].sub.M] represent vectors of constants and residuals, respectively. Similar to other studies of the political economy of trade-barrier concessions, including the most seminal contributions in this area, such as Pincus (1975), Caves (1976), Anderson (1980), Ray (1981a,b, 1987), Trefler (1993), and Lee and Swagel (1997), my model does not incorporate the desired level of rigor often evident in behavioral functions that are explicitly derived from fully specified optimization frameworks. In an effort to, at least partly, ameliorate this deficiency inherent to the relevant area of study, the model is subjected to sensitivity analysis. The relevant details are discussed in section 3. The specification of Equations (1) and (2) is examined below. The Tariff Equation Discretionary Tariffs and the GAIT The dependent variable of the tariff equation represents the unweighted average nominal tariff rate (10) that prevailed during fiscal year 1990/199 1 in the case of each of the examined industries. (11) Clearly, the dispersion in cross-industry tariff concessions may be viewed as the product of political process only if policymakers have discretion over the relevant tariff rates. In this context, it should be noted that in 1991 tariffs were not constrained by the GATT in any significant way. Although, among the 23 original signatories to the 1948 GATT, Australia did not take part in the GATT negotiations of the 1950s and did not fully participate in the Kennedy Round of 1964-1967 or the Tokyo Round of 1974-4979. As Capling and Galligan (1992) explained, Australia's "in-principle" support for the GATT was "eventually tempered by domestic considerations" (12) (p. 106). Indeed, it is widely acknowledged that, whatever the reasons for joining the GATT in the first place, the ultimate determinant of Australia's in herently incongruous position of a nonparticipatory membership was a vociferous commitment to high levels of industrial protection. (13) "... The Australian government was, quite simply, not prepared to make the sacrifice of autonomy with respect to tariff making that goes with tariff commitments" (Snape, Gropp, and Luttrell 1998, p. 365). (14) Still, to the extent feasible by its political economy, Australia did make a handful of pre-1991 concessions to its trading partners under the GAIT. Table 1 outlines a host of rather generous measures of the coverage and incidence of these concessions. The first column reports the total value of imports "corresponding" to each of the industries examined in the present study, and columns 2-9 outline the portion of these imports that were subject to relevant "tariff bindings" (15) in 1991. According to the summary results, outlined at the bottom of the table, the median industry's share of imports that were "tariff-bound" by each, as well as the cumulative effect, of the relevant GAIT agreements (see columns 3, 5, 7, and 9) is given by 0%. It may also be noted that, on average, the portion of an industry's imports that were subject to tariff bindings introduced by the 1948 agreement, the Kennedy round, and the Tokyo round corresponded to 11.32%, 0.51%, and 4.87%, respectively. From these figures, it may be inferred that in 1991 only about 16.7% (16) of the average industry's imports were subject to bindings. Finally, from the summary results in column 8, we note that the share of aggregate, industrywide imports subject to tariff bindings is <30%. Clearly, the information provided in the first nine columns of Table 1 that we have so far examined suggests that the coverage of Australia's tariff bindings was relatively small. Still, this information exaggerates and misleads. In actuality, relevant GATT commitments were of considerably lesser magnitude. The overestimation of GATT-related obligations derives partly from the presumption, inherent in the method of measurement used in columns 2-9, that the mere existence of a given "tariff binding" invariably abolishes the policymaker's discretion to determine the magnitude of the relevant tariff. This is not so. A binding will limit tariff-setting discretion only when it is "active"--that is, only when the ceiling that it entails is lower than the tariff level the policymaker actually wishes to implement. it turns out that, as noted by Snape, Gropp, and Luttrell (1998, P. 363), in Australia's case, a good portion of applied rates have often assumed values below their corresponding bound rates. This seems to suggest that, perhaps in the interest of projecting good faith, the Australian government is likely to have made a number of pseudo concessions by agreeing to bindings at sufficiently high levels that did not actively challenge its tariff-setting autonomy. This notion finds support in the evidence. Indeed, t he existence of such pseudo concessions represents a necessary condition for reconciling my calculations, which suggest that the Tokyo Round resulted in tariff bindings corresponding to 9.32% of aggregate imports of the manufacturing sector, (17) and the Australian government's official claim that the Tokyo round was settled "... without reducing the current level of tariff protection on a single tariff item applicable to any manufacturing industry." (18) To assess the proportion of tariff bindings that were active during 1990/1991, we may consider a comparison between the relevant tariff levels (i.e., applied rates) and the associated ceilings (i.e., bound rates) originating in pre-1991 GATT agreements. Unfortunately, such a comparison will not render clear results because it is often difficult to determine whether equality between applied rates and bound rates represents an active binding. That is, it is not always possible to determine whether certain bound rates were set at sufficiently high levels to accommodate existing tariffs or whether tariffs were lowered (presumably below what they would be in the absence of foreign influence) so that they would fall in line with corresponding bound rates. In addressing this problem, I err on the side of overestimating the portion of bindings that are active, thereby "stacking the deck" against my thesis. I do so by labeling all instances in which applied rates are equal to bound rates as "active." (19) The relevant results are reported in columns 10, 11, and 12. From column 11, it may be noted that, at the most, only 73.51% of prevailing tariff bindings were active during 1991, which, as reported in column 10 (12), renders, at most, only 20.19% (12.55%) of the aggregate manufacturing sector's (the average manufacturing industry's) imports subject to "active" tariff bindings. Perhaps a preferable perspective of the scale and incidence of tariff bindings may be gained by examining a measure that does not involve the value of imports (an endogenous variable in our analysis). In this spirit, I counted the percentage of six-digit level Harmonized index (HS6) import categories (or "tariff lines") characterized by active bindings that "correspond" to each of the four-digit level ASIC manufacturing industries that are examined in my study. The results are reported in column 13. An inspection of these figures suggests that only 6 (5.5%) of the 109 examined industries had >50% of their corresponding tariff lines actively bound. In addition, it appears that only 16.5% (12.1%) out of all Australian tariff lines were subject to GATT-related bindings (active bindings). These figures are largely consistent with Anderson's (1995, p. 100) claim that, previous to the Uruguay Round, signed in 1994, only about 20% of Australian tariffs were bound by the GATT. An implicit assumption in the preceding discussion is that bindings are largely "exogenous" with respect to rent-seeking dynamics. However, as has been noted by a number of authors, including Bagwell and Staiger (1999) and Kim (2000), GATT negotiations are not immune to domestic distributional concerns. Instead, GATT outcomes are vulnerable to the same political pressure examined by the mainstream literature on endogenous trade policy formation. Strong empirical evidence that supports this claim has been provided both in terms of GATT process (see, e.g., Baldwin and Magee 2000), as well as from the perspective of GATT outcomes. Examples that belong in the latter category include Marvel and Ray (1983) and Baldwin (1985), who found that industries that received more protection after the Kennedy and Tokyo Rounds had received greater levels of protection going into each round. The notion that GATT concessions are vulnerable to rent-seeking activities has important implications for my analysis. At the very least, the existence of such a link helps identify the origins of what I labeled earlier as pseudo concessions, casting doubt on the very assumption that equality of bound rates and applied rates is even likely to signify a binding with active status. Perhaps more important, the endogeneity of GATT concessions emphasizes the need not only to account for the proportion of bindings corresponding to any given industry that are active, but also to consider the differential levels of bound rates associated with such active bindings. In other words, if GATT bindings are in fact "endogenous," then it is not reasonable to consider that any two active bindings with different bound rates will limit the policymakers discretion symmetrically (as I have done for the purpose of constructing Table 1). In an earlier part of this section I argued that, because of methodological reasons, the calculated figure of 12.1% (20.19%) is bound to overestimate the portion of existing tariff lines (aggregate imports) subject to active tariff bindings during 1990/1991. Methodology aside, the "endogeneity" of GATT bindings provides yet another reason why these figures are likely to overstate the extent to which the GATT may have meaningfully constrained the policymakers' ability to provide discretionary and differential levels of tariff protection across the various industries. Together, these sources of bias advocate that the precise coverage and incidence of active bindings is unclear. What is, however, abundantly clear is that, given the small magnitude of these (inflated) figures, the GATT had little effect on tariff-setting autonomy. Hence, it is safe to conclude that the dispersion of tariff rates that prevailed in the 1990/1991 industrial cross-section is highly consistent with the model of discretionary, endogeno usly determined levels of protection that is proposed in the present article. The Determinants In choosing relevant explanatory variables for the tariff equation, I follow Ray (1981a) by assuming that the dispersion of tariff rates across the various industries reflects the maximization of industry profits subject to political constraints. If sufficiently profitable, and to the extent made feasible by organizational costs, protection will be pursued via lobbying activities and is likely to elicit a positive response from self-interested politicians. I consider that industry characteristics affect the profitability of trade barrier concessions as well as the political parameters within which such concessions can be pursued. The relevant industry characteristics incorporated in the tariff equation, together with the methods used to construct them, are outlined in Table 2 and are discussed below. Import penetration is chosen over unsealed imports to capture the extent to which infiltration of foreign products in the domestic economy represents a legitimate threat to domestic manufacturers. As was already argued in the Introduction, our a priori expectation is that an increase in import penetration will lead to an increase in the corresponding tariff rate. In what follows, I refer to this as the "orthodox" empirical prediction. This prediction derives from the bulk of theoretical models in the area of endogenous protection, including Brock and Magee (1978), Findlay and Wellisz (1982), Hillman (1982), and Mayer (1984). It is therefore not surprising that the orthodox prediction is routinely proposed in relevant empirical pieces--see, for example, Anderson (1980), Ray (1981b), Trefler (1993), and Lee and Swagel (1997). Still, it is important to emphasize the absence of a relevant consensus in the pertinent literature. For example, in a recent contribution, Grossman and Helpman (1994) suggested that, under certain conditions, the alternative prediction (of lower import penetration giving rise to higher trade protection) is possible. Extending the analysis further, Helpman (1997) showed that even those models that are credited for having introduced the orthodox prediction, such as Findlay and Wellisz (1982), Hillman (1982), and Mayer (1984), switch to the alternative prediction if they are reinterpreted within the context of a specific-factors model of international trade. Contributions advocating the alternative prediction provide important perspectives of the political economy of trade policy formation. However, they do not effectively challenge our empirical expectation of higher import penetration giving rise to higher tariffs. As was recently shown by Maggi and Rodriguez-Glare (2000), the derivation of the alternative prediction by studies such as Grossman and Helpman (1994) and Helpman (1997) depends critically on two fairly artificial assumptions: that (1) trade taxes are the only policy instruments available to policymakers and (2) the government has access to nondistortionary taxation. When these assumptions are relinquished in favor of a more realistic setting, Maggi and Rodriguez-Glare (2000) demonstrate that the positive relationship between import penetration and protection is restored. Furthermore, they confirm that this relationship will prevail irrespective of whether the type of protection considered corresponds to quantitative restrictions, or tariffs, as in t he case of the present article. Following Trefler (1993), import penetration also enters the tariff equation indirectly, via A(import penetration). Although a separate equation is not specified for this variable, it is important to note that it is treated analogously with import penetration as endogenous in the estimation of the model. For reasons outlined in the Introduction, the coefficient associated with A(import penetration) is expected to be positive. The percentage of a domestic industry's output that is exported abroad represents an important measure of comparative advantage, and we expect that it will be negatively correlated with import tariffs. Industries with a more pronounced export orientation, which export a relatively substantial percentage of their output, are likely to profit less from protection for two distinct, but closely related, reasons. First, export orientation reflects relatively efficient production circumstances. Hence, foreign imports are not likely to represent a legitimate threat to the sales of domestic producers. Second, protection of export-oriented industries may provoke retaliatory action by foreign nations that will affect profit adversely. According to the Olson-Stigler lobby behavior (Olson 1965; Stigler 1971, 1974), lobbying contributions for protection are linear homogeneous with respect to the expected reward and inversely related with coordination transaction costs and existing entry barriers. To capture these elements, vector [X.sub.T] collects variables pertaining to industry concentration, the number of establishments scaled by turnover, and capital stock. Greater concentration reduces the free rider problem and is expected to lead to higher protection. At the same time, as was argued by Caves (1976) and Ray (1981b, p. 164), less-concentrated, widely dispersed industries may have a stronger political base to lobby for protection. In view of the conflicting dynamics, we do not form an a priori expectation regarding the sign of this variable. As was previously noted, the transaction costs associated with the coordination of industrial lobbies is further investigated through a regressor labeled "number of establishments." This variable cor responds to the number of establishments scaled by turnover, to account for the expected linear relationship between lobby contributions and expected benefits of tariff concessions. A smaller number of establishments, relative to industry turnover, ameliorates the free rider problem, thereby increasing the level of protection. Capital stock represents at least two distinct dimensions relevant to processes investigated in the present study. On the one hand, similar to Trefler (1993, pp. 141, 146) and Goldberg and Maggi (1999, p. 1145), I consider this variable to proxy existing, tariff-independent barriers to entry that, if they apply symmetrically to domestic and foreign rivals, will reduce the value and, therefore, the level of protection. On the other hand, this variable may be viewed as reflecting an important aspect of the potential returns to protection. Along these lines, I note that, as was pointed out by Trefler (1993, p. 141), the less extensive the mobility of capital, the greater the quasi rents associated with protection and the higher the profitability of lobbying effort. Given the antagonist dynamics associated with this variable, I do not speculate as to an expected sign. An important dimension of endogenous trade-policy formation relates to the extent to which industries lobbying for protection are "disadvantaged." From the protection demand perspective Magee, Brock, and Young (1989) asserted that disadvantaged groups have a low opportunity cost of lobbying. From the supply standpoint, it was argued by Anderson (1980, p. 136) that Australian voters are more likely to disapprove of assistance that is dispensed to industries that are not generally considered to be facing significant hardship. Following Anderson (1980, pp. 136-7), Hillman (1982, p. 1180), and Trefler (1993, p. 142), an industry is considered to be "disadvantaged" if it experiences a slow growth rate (20) and if a considerable proportion of its workforce corresponds to production (i.e., relatively unskilled) labor. In the interest of investigating the latter variable comprehensively, the tariff equation also incorporates two related occupational variables pertaining to the proportion of white-collar and semiskill ed labor in aggregate industry employment. Given our earlier discussion, the expected sign of industry growth is negative and that of production labor is positive. The remaining occupational variables are not signed ex ante. In addition to measures already discussed, the "labor interest" is further represented by aggregate industry employment and the geographic concentration of employment in each industry across the eight Australian states and territories. The former variable is expected to exhibit a positive relationship with the level of protection given that large clusters of workers represent large clusters of votes. At the same time, as was noted by Pincus (1975), Anderson (1980), and Conybeare (1984), geographically concentrated industries with small employment may very well receive a disproportionately large level of assistance "... particularly the more marginal the electorates in which an industry is located ... and especially since the possibility of 'log-rolling' amongst politicians in the party ro om or in the Cabinet helps to offset the disadvantage of supplying few votes" (Anderson 1980, p. 137). (21) Such positive effects are compounded by the fact that geographically concentrated employment is expected to complement the role of high industry concentration and a small number of firms by curtailing the free rider problem. Hence, we expect a positive relationship between geographic concentration and the dependent variable. The Import Equation The adopted specification of the import equation, outlined in Table 2, is consistent with a Heckscher-Ohlin framework of trade, not unlike that adopted by Ray (198 ib) and Trefler (1993). Specifically, this equation collects the factor intensities of the primary inputs of capital and labor that are represented by the value of capital scaled by turnover and the sum of gross wages and salaries scaled by turnover, respectively. Given that these variables are distinct from exogenous variables used in the tariff equation, the framework of analysis is econometrically identified. (22) To form a fully simultaneous model and to account for all relevant feedback effects, the nominal average tariff level is added as a final explanatory variable in the import equation. 3. Econometric Implementation and Empirical Results The econometric results discussed in this section were generated using cross-section data for the 109 Australian manufacturing industries outlined in Table 1 for fiscal year 1990/1991. The data set was constructed using information obtained from the Industry Profiles, the Australian Manufacturing Industry and International Trade Data 1968-69 to 1992-93, the Trade Analysis and Information System (TRAINS) CD-ROM, the 1991 Census of Population and Housing, and additional customized information provided by the Australian Bureau of Statistics and the United Nations Conference on Trade and Development (UNCTAD). (23) The equations of the model outlined in the previous section were estimated simultaneously as well as independently. Simultaneous equation regressions used both two-stage least-squares (2SLS) and three-stage least-squares (3SLS) methods. To facilitate accurate estimations, the vector of instruments included not only the characterizations of the relevant model regressors that appear in Table 2 but also alternative, comparably meaningful, definitions of these variables. (24) Independent estimations of the model equations were performed using the ordinary least-squares (OLS) method. Where possible, the covariance matrix was corrected for heteroskedasticity using the method proposed by White (1980) and Greene (1997). The resulting parameter estimates of independent and simultaneous regressions of the model equations, outlined in the previous section, are reported in Table 3, together with the associated t-statistics and adjusted R-squared measures. (25) I first examine the implementations of the 2SLS and 3SLS methods of simultaneous equations estimation. According to Table 3, the results of the two estimation techniques are virtually identical. Furthermore, the majority of the coefficients estimated using these methods are statistically significant and qualitatively consistent with my expectations. From the last two sets of columns of Table 3, I note that a dynamic change in import penetration [[DELTA](import penetration)] is negatively correlated with the prevailing nominal tariff rate. In the earlier discussion, I predicted that the coefficient of this variable would be positive by considering not only that high tariff rates are correlated with high import-penetration rates but also that, despite the overall downward trend exhibited by Australian tariffs over the 1981/1982-1990/1991 period, changes in import penetration that have taken place during this period may explain the relative dispersion in the levels of assistance that prevailed in 1990/1991. This does not seem to be the case. The implication of this finding is that a large increase in import penetration, in the case of an industry that, despite this change is still experiencing relatively little foreign competition, will not drive the relevant tariff concession higher than that awarded to any other industry that is facing a higher overall im port penetration. This result may reflect the presence of certain rigidities in the system that may derive from the increasingly unpalatable nature of tariffs. Large increases in import penetration in the case of industries that traditionally only received a moderate level of protection may lead to small relative changes in the level of assistance, whereas a higher degree of institutional flexibility to increase the relative level of protection may be present in the case of industries that have a long tradition of receiving considerable assistance from the government. (26) Given the conflicting dynamics associated with changes in the level of industry concentration, this variable was not signed ex ante. The estimated coefficient corresponding to this variable is found to be negative and statistically significant, which suggests that protection favors widely dispersed industries. This result is novel in the Australian context: Previous studies of endogenous trade policy formation have not explored the empirical relevance of this variable. Comparing this result with corresponding findings of studies that used U.S. and Canadian data is not particularly instructive. Whereas Caves (1976) identifies a negative and Trefler (1993) a positive coefficient for analogous variables, Ray (198 la,b) finds mixed results that are sensitive to the adopted specification of the relevant equation. A second measure of the "centrality" of industrial organization pertains to geographic concentration. While not previously investigated in an empirical setting, geographic concentration has long been viewed as an important industry characteristic in the context of the political economy of policy formation in Australia. Given my earlier discussion, which relied primarily on Anderson's (1980) theoretical analysis of the channels through which geographic concentration may influence industry assistance, this variable was expected to exhibit a positive correlation with the level of protection. My findings provide support to Anderson's prediction, at least to the extent suggested by a positive but statistically insignificant coefficient. Turning our attention to capital stock, we find that this variable exhibits a negative relationship with the level of assistance. It is worth noting that the relevant coefficient is statistically significant at the 1% level and is highly insensitive to the various estimation methods that are used. This result is consistent with the role of capital stock as a proxy for existing barriers to entry that diminish the value, and therefore the incidence, of protection. Contrary to my expectation, I find that production labor, which represents one of the variables intended to capture the extent to which an industry may be viewed as disadvantaged and therefore "worthy" of assistance, is negatively correlated with the level of protection. Furthermore, I find that the proportions of the other two occupational categories, given by white-collar and semiskilled workers, that are employed in the various industries are also negatively related to the level of protection. A comprehensive interpretation of these results is not readily evident. It is, however, important to emphasize that the employed occupational variables amount to fairly crude representations and may easily disguise aspects of prevailing occupational biases of industry assistance that may relate to more detailed labor disaggregations. The remaining variables are comparable with those empirically investigated by Anderson (1980). With the exception of the coefficient of import penetration, all remaining coefficients--exports, number of establishments, industry growth, and aggregate employment--reinforce Anderson's findings and are all consistent with my a priori expectations. Specifically, I find that the level of assistance dispensed by the government in terms of tariff concessions is biased toward industries that are characterized by comparative disadvantage, few establishments, slow growth, and a large workforce. Despite considerable convergence between my results and those of previous studies, the two do differ in the case of the most fundamental dimension that is investigated: import penetration. Consistent with the prediction of the theory of endogenous protection, I find that an increase in import penetration is positively and significantly correlated with the nominal rate of assistance. However, using single-equation estimation techniques and Australian data, similar studies, including Anderson (1980) and Aislabie (1988), found import penetration to be negatively correlated with the level of protection. The implication that trade barriers are unprotective presented a puzzling proposition to these authors. Anderson (1980) noted, characteristically, "The negative though mostly insignificant coefficient for IMP (i.e., import penetration) indicates that the more assisted industries have not necessarily been those whose domestic markets have been supplied largely by imports. But this is probably because industry assis tance itself has reduced import penetration ratios in highly assisted industries to well below what they would have been in the absence of assistance. Certainly one should not conclude from this result that the stronger the import competition, the less assistance an industry is likely to receive" (27) (p. 139). Anderson was correct in considering that his single-equation estimation technique effectively "fused" the reciprocal causal flows between import penetration and the level of protection. Contrary to Anderson's framework, the model used in the present study allows the simultaneous determination of the two variables, thereby "disentangling" the impact of a higher import penetration on tariffs, and, in turn, the effect of such higher tariffs on import penetration. To evaluate the extent to which single-estimation techniques that are used in the context of endogenous trade-theory models may underestimate the impact of import penetration on protection, I proceed to compare the relevant coefficient derived by estimating the tariff equation independently using OLS and simultaneously with the import equation using 2SLS or 3SLS. As it may be noted from Table 3, the coefficients of import penetration in the case of 2SLS and 3SLS estimations are virtually identical and correspond to 0.22. However, the corresponding coefficient assumes the value 0.046 when estimated with OLS. Hence, when the bidirectional relationship between import penetration and the level of protection is disentangled, the coefficient of the former increases by more than a staggering fourfold! Turning our attention to the import equation, we note that although labor intensity is positively and significantly correlated with imports, the coefficient pertaining to capital intensity does not exhibit statistical significance. Although my study does not concentrate on the determinants of comparative advantage, it is important to note that these results are roughly consistent with relevant stylized facts as well as the main findings of studies that investigate aggregate Australian import-demand functions, such as Tombazos (1999). Finally, I note that, as expected, tariffs are negatively and, at least in the case of the 3SLS estimation, significantly correlated with import penetration. Similar to the case of single-equation studies of endogenous protection, previous investigations of the impact of tariffs on imports, such as Simmons and Smith (1994), did not account for the bidirectional nature of the relationship between the two variables. This generated equally puzzling results: Tariff decreases were gen erally found to have a surprising small effect on imports. To shed light on this issue, I proceed to compare the corresponding coefficients of tariffs (in the import equation) derived using OLS and the simultaneous 3SLS technique. The parameter estimate generated by the former method is -0.18, and the coefficient that corresponds to the latter technique is -0.49. Hence, at least in the context of the model employed in the present study, accounting for the relevant feedback effects leads to an estimate of the relevant coefficient that is more than two and a half times as large as the corresponding estimate derived from a framework that ignores the issue of simultaneity. The robustness of my results depends critically on the extent to which they may be sensitive to the specification of the tariff equation. In an effort to investigate this issue, I estimated alternative formulations of the system of simultaneous equations that entailed dropping regressors other than import penetration, my key variable, from the tariff equation, one at a time. (28) In addition, the model was also estimated after dropping all peripheral instruments. (29) The resulting sensitivity analysis protocol required the estimation of 12 models. To facilitate a meaningful comparison of analogous estimates derived from simultaneous-equation and single-equation regressions, I also performed similarly specified independent estimations of the tariff equation using OLS. Table 4 summarizes the results. In the case of the 3SLS estimations, I report the likelihood-ratio test pertaining to each alternatively specified edition of the tariff equation. In addition, for each set of corresponding simultaneous and indepe ndent regressions, I report the 3SLS estimate of the coefficient of import penetration [[beta].sup.3SLS.sub.M] the ratio between corresponding import penetration coefficients derived via 3SLS and OLS, [[beta].sup.3SLS.sub.M]/[[beta].sup.OLS.sub.M], the 3SLS estimate of the coefficient of the tariff variable [[beta].sup.3SLS.sub.T], and the ratio between corresponding tariff level coefficients derived via 3SLS and OLS, [[beta].sup.3SLS.sub.T]/[[beta].sup.OLS.sub.T]. Finally, where applicable, I report coefficient sign reversals in the case of both single-equation and system of equations estimations. According to the first column of Table 4, the likelihood-ratio test renders significant results in the case of the majority of the regressors and instruments used in the 3SLS estimation. Furthermore, the values of [[beta].sup.3SLS.sub.M] and [[beta].sup.3SLS.sub.T] are reasonably stable across the bulk of the various specifications. More important, as the reported values for [[beta].sup.3SLS.sub.M]/[[beta].sup.OLS.sub.M] and [[beta].sup.3SLS.sub.T]/[[beta].sup.OLS.sub.T] show, irrespective of the specification, single-equation estimations invariably underestimate (the absolute value of) the coefficients of both import penetration and tariffs. In addition, although sign reversals are generated by both single-equation and system of equations estimations, only the former reverse the sign of import penetration. Sign reversals that are generated by the simultaneous models are confined to the case of only two coefficients, both of which were, at least at the 5% level, statistically insignificant in the original, unconstrained model. It is worth noting from Table 4 that the sign of the coefficient of import penetration that appeared in the tariff equation exhibits a reversal in the case of the single-equation estimation when certain occupational variables are dropped. Of interest, these are variables not used by studies of endogenous policy formation that employed Australian data, such as Anderson (1980) and Aislabie (1988). Hence, in a sense, the single-equation regressions that exclude the relevant occupational industry characteristics effectively "reproduce" the puzzling results of those authors using, of course, entirely distinct regression equations and data sets. It is important to note that, even in such an extreme case, in which the coefficient of import penetration is underestimated to the extent that it exhibits a sign reversal, the simultaneous estimation of this coefficient is sufficiently robust to maintain its positive qualitative dimension intact. 4. Concluding Remarks Previous studies of endogenous protection on the one hand and trade liberalization on the other that employed Australian data have generated perplexing results. The findings of the former are consistent with a framework of unprotective tariffs, and the results of the latter suggest that liberalization is generally ineffectual in stimulating imports. In the present article, I demonstrate that the source of such puzzling results is found in the misspecification of analytical frameworks used by the relevant studies that ignore the bidirectional causal relationship between levels of protection and import penetration. The model I used improves on similar studies that employ Australian data in two distinct ways. First, it investigated the significance of a number of dimensions of the theory of endogenous trade policy formation not previously examined in the relevant literature, using relatively recent data. Second, and most important, it facilitates the simultaneous determination of import penetration and tariffs. This approach disentangles the relevant feedback effects, which can then be estimated independently. The results are of considerable interest. When the bidirectional causal relationship is correctly specified, the estimated impact of import penetration on the tariff level increases by almost fivefold and that of tariffs on import penetration more than doubles. My results may inform a number of pertinent debates directly. However, they are perhaps most useful in introducing a new framework of analysis of the nexus between endogenous protection and the volume of Australian trade, with policy-relevant implications.
Table 1
Tariff Bindings Under the GATT
Imports
in 1991
ASIC Industry Description ($mill.)
Column label
and method of
calculation of
corresponding
values 1
2115 Meat (except small
goods or poultry) 40.6
2116 Poultry 9.1
2117 Bacon, ham and smailgoods nes 9.8
2121 Liquid milk and cream 2.7
2123 Cheese 99.6
2124 Ice cream and frozen confections 7.2
2131 Fruit products 100.4
2132 Vegetable products 204.3
2140 Margarine, oils, and fats nes 157.3
2153 Cereal foods and baking mixes 54.3
2161 Bread 1.9
2173 Confectionery and cocoa products 159.1
2174 Processed seafoods 397.9
2175 Prepared animal and bird foods 38.0
2185 Soft drinks, cordials, and syrups 187.7
2188 Wine and brandy 76.1
2342 Wool scouring and
top making 48.3
2344 Manmade fiber
broad-woven fabrics 375.2
2345 Cotton yarns and
broad-woven fabrics 443.7
2346 Worsted yams and
broad-woven fabrics 27.8
2347 Woolen yarns and
broad-woven fabrics 44.7
2348 Narrow-woven and
elastic textiles 103.9
2349 Textile finishing 65.0
2351 Household textiles 48.9
2352 Textile floor coverings 106.2
2353 Felt and felt products 19.6
2354 Canvas and associated
products nes 20.1
2355 Rope, cordage, and twine 24.3
2356 Textile products nes 379.4
2441 Hosiery 18.6
2442 Cardigans and pullovers 166.6
2451 Mens' trousers and
shorts; work clothing 78.7
2452 Mens' suits and coats;
waterproof clothing 71.3
2454 Foundation garments 25.2
2456 Headwear and clothing nes 178.9
2460 Footwear 379.2
2533 Veneers and manufactured
boards of wood 92.2
2534 Wooden doors 16.9
2535 Wooden structural fittings
and joinery nes 1.7
2536 Wooden containers 10.3
2537 Hardwood woodchips 0.2
2538 Wood products nes 177.6
2631 Pulp, paper, and paperboard 1080.5
2635 Paper products nes 92.6
2643 Paper stationery 101.0
2751 Chemical fertilizers 276.1
2753 Synthetic resins and rubber 628.3
2754 Organic industrial
chemicals nes 1188.8
2755 Inorganic industrial chemicals nes 788.3
2762 Paints 74.9
2763 Pharmaceutical and veterinary
products 1007.1
2764 Pesticides 53.4
2765 Soap and other detergents 67.6
2766 Cosmetics and toilet preparations 133.2
2767 Inks 18.6
2768 Chemical products nes 366.6
2780 Petroleum and coal products nes 15.9
2850 Glass and glass products 247.9
2861 Clay bricks 1.8
2863 Ceramic tiles and pipes 142.0
2864 Ceramic goods nes 149.7
2871 Cement 13.4
2882 Stone products 120.8
2883 Glass wool and mineral wool
products 29.8
2884 Nonmetallic mineral products nes 35.7
2942 Iron casting 7.4
2961 Aluminum rolling, drawing,
extruding 94.1
2962 Nonferrous metals: nes, rolling,
drawing, extruding 775.2
Architectural aluminum products
3142 Architectural aluminum products 14.8
3151 Metal containers 39.0
3161 Cutlery and hand tools nes 279.4
3163 Nuts, bolts, screws and rivets 139.7
3164 Metal coating and finishing 27.9
3165 Nonferrous steam, gas, and water
fittings 192.2
3166 Boiler and plate work 6.1
3232 Motor vehicle bodies, trailers, and
caravans 3.6
3233 Motor vehicle instruments and
electrical equipment nes 313.1
3241 Ships 391.1
3242 Boats 20.5
3243 Railway rolling stock and
locomotives 29.4
3244 Aircraft 2625.9
3245 Transport equipment nes 178.2
3341 Photographic and optical goods 771.5
3342 Photographic film processing 17.0
3343 Measuring, professional, and s
scientific equipment nes 1309.8
3351 Radio and TV receivers; audio
equipment 1182.0
3352 Electronic equipment nes 4783.6
3353 Refrigerators and household
appliances 840.7
3354 Water heating systems 8.6
3355 Electric and telephone cable and
wire 144.8
3356 Batteries 105.7
3361 Agricultural machinery 365.0
3362 Construction machinery 650.9
3363 Materials handling equipment 319.2
3364 Wood and metal working machinery 417.5
3365 Pumps and compressors 432.7
3366 Commercial space heating and
cooling equipment 54.4
3367 Dies, saw blades, and machine tool
tool accessories 180.7
3368 Food processing machinery 311.3
3369 Industrial machinery and equipment
nes 2700.4
3451 Leather, tanning, and fur dressing 121.5
3452 Leather and leather substitute
goods nes 148.5
3461 Rubber tires, tubes, belts, hose,
and sheet 530.4
3462 Rubber products nes 181.5
3482 Jewelery and silverware 310.4
3483 Brooms and brushes 35.2
3484 Signs and advertising displays 4.5
3486 Writing and marking equipment 71.3
3487 Manufacturing nes 14
Total 32,387.1
Average --
Median --
% of total imports subject to
bindings n.a.
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
Imports
Subject to
1948
Bindings
ASIC Industry Description ($mill.)
Column label
and method of
calculation of
corresponding
values 2
2115 Meat (except small
goods or poultry) 14.8
2116 Poultry 2.0
2117 Bacon, ham and smailgoods nes
2121 Liquid milk and cream
2123 Cheese
2124 Ice cream and frozen confections
2131 Fruit products 2.0
2132 Vegetable products 49.5
2140 Margarine, oils, and fats nes 53.4
2153 Cereal foods and baking mixes 0.3
2161 Bread
2173 Confectionery and cocoa products 48.6
2174 Processed seafoods 109.4
2175 Prepared animal and bird foods
2185 Soft drinks, cordials, and syrups 15.5
2188 Wine and brandy 50.3
2342 Wool scouring and
top making
2344 Manmade fiber
broad-woven fabrics
2345 Cotton yarns and
broad-woven fabrics 4.0
2346 Worsted yams and
broad-woven fabrics
2347 Woolen yarns and
broad-woven fabrics
2348 Narrow-woven and
elastic textiles
2349 Textile finishing
2351 Household textiles
2352 Textile floor coverings 36.6
2353 Felt and felt products
2354 Canvas and associated
products nes
2355 Rope, cordage, and twine
2356 Textile products nes 24.9
2441 Hosiery
2442 Cardigans and pullovers
2451 Mens' trousers and
shorts; work clothing
2452 Mens' suits and coats;
waterproof clothing
2454 Foundation garments
2456 Headwear and clothing nes 56.1
2460 Footwear
2533 Veneers and manufactured
boards of wood 9.8
2534 Wooden doors
2535 Wooden structural fittings
and joinery nes
2536 Wooden containers
2537 Hardwood woodchips
2538 Wood products nes
2631 Pulp, paper, and paperboard
2635 Paper products nes
2643 Paper stationery
2751 Chemical fertilizers 2.4
2753 Synthetic resins and rubber 0.2
2754 Organic industrial
chemicals nes 10.3
2755 Inorganic industrial chemicals nes 10.2
2762 Paints
2763 Pharmaceutical and veterinary
products 58.5
2764 Pesticides 11.3
2765 Soap and other detergents 39.8
2766 Cosmetics and toilet preparations 132.6
2767 Inks
2768 Chemical products nes 0.7
2780 Petroleum and coal products nes
2850 Glass and glass products 72.3
2861 Clay bricks
2863 Ceramic tiles and pipes
2864 Ceramic goods nes
2871 Cement
2882 Stone products
2883 Glass wool and mineral wool
products
2884 Nonmetallic mineral products nes 2.6
2942 Iron casting 0.1
2961 Aluminum rolling, drawing,
extruding
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.3
Architectural aluminum products
3142 Architectural aluminum products
3151 Metal containers
3161 Cutlery and hand tools nes 41.3
3163 Nuts, bolts, screws and rivets
3164 Metal coating and finishing
3165 Nonferrous steam, gas, and water
fittings
3166 Boiler and plate work
3232 Motor vehicle bodies, trailers, and
caravans
3233 Motor vehicle instruments and
electrical equipment nes 125.0
3241 Ships
3242 Boats
3243 Railway rolling stock and
locomotives 22.5
3244 Aircraft 1982.5
3245 Transport equipment nes 16.3
3341 Photographic and optical goods 331.5
3342 Photographic film processing
3343 Measuring, professional, and s
scientific equipment nes 161.7
3351 Radio and TV receivers; audio
equipment
3352 Electronic equipment nes 1155.5
3353 Refrigerators and household
appliances 350.3
3354 Water heating systems 5.4
3355 Electric and telephone cable and
wire
3356 Batteries
3361 Agricultural machinery 48.8
3362 Construction machinery 13.6
3363 Materials handling equipment 30.5
3364 Wood and metal working machinery
3365 Pumps and compressors 417.8
3366 Commercial space heating and
cooling equipment
3367 Dies, saw blades, and machine tool
tool accessories 2.8
3368 Food processing machinery
3369 Industrial machinery and equipment
nes 729.1
3451 Leather, tanning, and fur dressing
3452 Leather and leather substitute
goods nes
3461 Rubber tires, tubes, belts, hose,
and sheet 6.3
3462 Rubber products nes
3482 Jewelery and silverware 142.4
3483 Brooms and brushes 26.5
3484 Signs and advertising displays
3486 Writing and marking equipment
3487 Manufacturing nes 0.8
Total 6428.9
Average --
Median --
% of total imports subject to
bindings 19.85
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
Imports
Subject
% of to 1967
Imports (Kennedy
Subject round)
to 1948 bindings
ASIC Industry Description Bindings ($mill.)
Column label
and method of
calculation of
corresponding 3
values (=2/1) 4
2115 Meat (except small
goods or poultry) 36.54
2116 Poultry 22.01
2117 Bacon, ham and smailgoods nes 0.00
2121 Liquid milk and cream 0.00
2123 Cheese 0.00
2124 Ice cream and frozen confections 0.00
2131 Fruit products 1.94
2132 Vegetable products 24.23
2140 Margarine, oils, and fats nes 33.94
2153 Cereal foods and baking mixes 0.55
2161 Bread 0.00
2173 Confectionery and cocoa products 30.56
2174 Processed seafoods 27.49 60.9
2175 Prepared animal and bird foods 0.00
2185 Soft drinks, cordials, and syrups 8.27
2188 Wine and brandy 66.11
2342 Wool scouring and
top making 0.00
2344 Manmade fiber
broad-woven fabrics 0.00
2345 Cotton yarns and
broad-woven fabrics 0.89
2346 Worsted yams and
broad-woven fabrics 0.00
2347 Woolen yarns and
broad-woven fabrics 0.00
2348 Narrow-woven and
elastic textiles 0.00
2349 Textile finishing 0.00
2351 Household textiles 0.00
2352 Textile floor coverings 34.45
2353 Felt and felt products 0.00
2354 Canvas and associated
products nes 0.00
2355 Rope, cordage, and twine 0.00
2356 Textile products nes 6.56 7.0
2441 Hosiery 0.00
2442 Cardigans and pullovers 0.00
2451 Mens' trousers and
shorts; work clothing 0.00
2452 Mens' suits and coats;
waterproof clothing 0.00
2454 Foundation garments 0.00
2456 Headwear and clothing nes 31.36
2460 Footwear 0.00
2533 Veneers and manufactured
boards of wood 10.66
2534 Wooden doors 0.00
2535 Wooden structural fittings
and joinery nes 0.00
2536 Wooden containers 0.00
2537 Hardwood woodchips 0.00
2538 Wood products nes 0.00
2631 Pulp, paper, and paperboard 0.00
2635 Paper products nes 0.00 3.0
2643 Paper stationery 0.00
2751 Chemical fertilizers 0.85
2753 Synthetic resins and rubber 0.03
2754 Organic industrial
chemicals nes 0.87
2755 Inorganic industrial chemicals nes 1.30
2762 Paints 0.00
2763 Pharmaceutical and veterinary
products 5.81
2764 Pesticides 21.09
2765 Soap and other detergents 58.90
2766 Cosmetics and toilet preparations 99.55
2767 Inks 0.00
2768 Chemical products nes 0.20
2780 Petroleum and coal products nes 0.00
2850 Glass and glass products 29.15 3.4
2861 Clay bricks 0.00
2863 Ceramic tiles and pipes 0.00
2864 Ceramic goods nes 0.00
2871 Cement 0.00
2882 Stone products 0.00
2883 Glass wool and mineral wool
products 0.00
2884 Nonmetallic mineral products nes 7.28
2942 Iron casting 0.75
2961 Aluminum rolling, drawing,
extruding 0.00
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.04
Architectural aluminum products
3142 Architectural aluminum products 0.00
3151 Metal containers 0.00
3161 Cutlery and hand tools nes 14.77
3163 Nuts, bolts, screws and rivets 0.00
3164 Metal coating and finishing 0.00
3165 Nonferrous steam, gas, and water
fittings 0.00
3166 Boiler and plate work 0.00
3232 Motor vehicle bodies, trailers, and
caravans 0.00
3233 Motor vehicle instruments and
electrical equipment nes 39.93
3241 Ships 0.00
3242 Boats 0.00
3243 Railway rolling stock and
locomotives 76.63
3244 Aircraft 75.50
3245 Transport equipment nes 9.16 1.3
3341 Photographic and optical goods 42.97 32.8
3342 Photographic film processing 0.0
3343 Measuring, professional, and s
scientific equipment nes 12.35
3351 Radio and TV receivers; audio
equipment 0.00
3352 Electronic equipment nes 24.15
3353 Refrigerators and household
appliances 41.67 51.3
3354 Water heating systems 63.07
3355 Electric and telephone cable and
wire 0.00 24.8
3356 Batteries 0.00
3361 Agricultural machinery 13.36
3362 Construction machinery 2.09
3363 Materials handling equipment 9.56
3364 Wood and metal working machinery 0.00 6.7
3365 Pumps and compressors 96.56 11.9
3366 Commercial space heating and
cooling equipment 0.00
3367 Dies, saw blades, and machine tool
tool accessories 1.55
3368 Food processing machinery 0.01
3369 Industrial machinery and equipment
nes 27.00 38.0
3451 Leather, tanning, and fur dressing 0.00
3452 Leather and leather substitute
goods nes 0.00
3461 Rubber tires, tubes, belts, hose,
and sheet 1.19
3462 Rubber products nes 0.00
3482 Jewelery and silverware 45.87
3483 Brooms and brushes 75.15
3484 Signs and advertising displays 0.00
3486 Writing and marking equipment 0.00
3487 Manufacturing nes 0.52
Total n.a. 241.1
Average 11.32 --
Median 0.00 --
% of total imports subject to
bindings n.a. 0.74
% of total HS6 records subject
to bindings (b) n.a. n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a. n.a.
% of Imports
Imports Subject
Subject to 1979
to 1967 (Tokyo
(Kennedy round)
round) bindings
ASIC Industry Description bindings ($mill.)
Column label
and method of
calculation of
corresponding 5
values (=4/1) 6
2115 Meat (except small
goods or poultry) 0.00
2116 Poultry 0.00
2117 Bacon, ham and smailgoods nes 0.00
2121 Liquid milk and cream 0.00
2123 Cheese 0.00
2124 Ice cream and frozen confections 0.00
2131 Fruit products 0.00 5.3
2132 Vegetable products 0.00 58.5
2140 Margarine, oils, and fats nes 0.00 8.6
2153 Cereal foods and baking mixes 0.00
2161 Bread 0.00
2173 Confectionery and cocoa products 0.00 16.2
2174 Processed seafoods 15.31 46.4
2175 Prepared animal and bird foods 0.00
2185 Soft drinks, cordials, and syrups 0.00
2188 Wine and brandy 0.00
2342 Wool scouring and
top making 0.00
2344 Manmade fiber
broad-woven fabrics 0.00
2345 Cotton yarns and
broad-woven fabrics 0.00 7.7
2346 Worsted yams and
broad-woven fabrics 0.00
2347 Woolen yarns and
broad-woven fabrics 0.00
2348 Narrow-woven and
elastic textiles 0.00
2349 Textile finishing 0.00
2351 Household textiles 0.00
2352 Textile floor coverings 0.00
2353 Felt and felt products 0.00
2354 Canvas and associated
products nes 0.00
2355 Rope, cordage, and twine 0.00
2356 Textile products nes 1.85 3.6
2441 Hosiery 0.00
2442 Cardigans and pullovers 0.00
2451 Mens' trousers and
shorts; work clothing 0.00
2452 Mens' suits and coats;
waterproof clothing 0.00
2454 Foundation garments 0.00
2456 Headwear and clothing nes 0.00
2460 Footwear 0.00
2533 Veneers and manufactured
boards of wood 0.00
2534 Wooden doors 0.00
2535 Wooden structural fittings
and joinery nes 0.00
2536 Wooden containers 0.00
2537 Hardwood woodchips 0.00
2538 Wood products nes 0.00
2631 Pulp, paper, and paperboard 0.00 196.0
2635 Paper products nes 3.19
2643 Paper stationery 0.00
2751 Chemical fertilizers 0.00
2753 Synthetic resins and rubber 0.00 40.4
2754 Organic industrial
chemicals nes 0.00 44.1
2755 Inorganic industrial chemicals nes 0.00
2762 Paints 0.00 28.0
2763 Pharmaceutical and veterinary
products 0.00 109.0
2764 Pesticides 0.00 25.5
2765 Soap and other detergents 0.00 12.9
2766 Cosmetics and toilet preparations 0.00
2767 Inks 0.00
2768 Chemical products nes 0.00 12.8
2780 Petroleum and coal products nes 0.00
2850 Glass and glass products 1.38
2861 Clay bricks 0.00
2863 Ceramic tiles and pipes 0.00
2864 Ceramic goods nes 0.00
2871 Cement 0.00
2882 Stone products 0.00
2883 Glass wool and mineral wool
products 0.00
2884 Nonmetallic mineral products nes 0.00
2942 Iron casting 0.00 1.8
2961 Aluminum rolling, drawing,
extruding 0.00
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.00
Architectural aluminum products
3142 Architectural aluminum products 0.00
3151 Metal containers 0.00 0.1
3161 Cutlery and hand tools nes 0.00
3163 Nuts, bolts, screws and rivets 0.00
3164 Metal coating and finishing 0.00
3165 Nonferrous steam, gas, and water
fittings 0.00 135.5
3166 Boiler and plate work 0.00
3232 Motor vehicle bodies, trailers, and
caravans 0.00
3233 Motor vehicle instruments and
electrical equipment nes 0.00 0.5
3241 Ships 0.00
3242 Boats 0.00
3243 Railway rolling stock and
locomotives 0.00
3244 Aircraft 0.00 44.3
3245 Transport equipment nes 0.70 30.5
3341 Photographic and optical goods 4.25 0.4
3342 Photographic film processing 0.00
3343 Measuring, professional, and s
scientific equipment nes 0.00 480.8
3351 Radio and TV receivers; audio
equipment 0.00
3352 Electronic equipment nes 0.00 647.7
3353 Refrigerators and household
appliances 6.10 7.7
3354 Water heating systems 0.00
3355 Electric and telephone cable and
wire 17.13
3356 Batteries 0.00
3361 Agricultural machinery 0.00 170.1
3362 Construction machinery 0.00 330.7
3363 Materials handling equipment 0.00 5.5
3364 Wood and metal working machinery 1.61 2.2
3365 Pumps and compressors 2.76
3366 Commercial space heating and
cooling equipment 0.00
3367 Dies, saw blades, and machine tool
tool accessories 0.00 5.0
3368 Food processing machinery 0.00 98.3
3369 Industrial machinery and equipment
nes 1.41 433.0
3451 Leather, tanning, and fur dressing 0.00
3452 Leather and leather substitute
goods nes 0.00
3461 Rubber tires, tubes, belts, hose,
and sheet 0.00 1.1
3462 Rubber products nes 0.00
3482 Jewelery and silverware 0.00
3483 Brooms and brushes 0.00
3484 Signs and advertising displays 0.00
3486 Writing and marking equipment 0.00
3487 Manufacturing nes 0.00 7.1
Total n.a. 3017.1
Average 0.51 --
Median 0.00 --
% of total imports subject to
bindings n.a. 9.32
% of total HS6 records subject
to bindings (b) n.a. n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a. n.a.
% of
Imports
Subject
to 1979
(Tokyo
round)
ASIC Industry Description bindings
Column label
and method of
calculation of
corresponding 7
values (=6/1)
2115 Meat (except small
goods or poultry) 0.00
2116 Poultry 0.00
2117 Bacon, ham and smailgoods nes 0.00
2121 Liquid milk and cream 0.00
2123 Cheese 0.00
2124 Ice cream and frozen confections 0.00
2131 Fruit products 5.28
2132 Vegetable products 28.61
2140 Margarine, oils, and fats nes 5.47
2153 Cereal foods and baking mixes 0.00
2161 Bread 0.00
2173 Confectionery and cocoa products 10.16
2174 Processed seafoods 11.67
2175 Prepared animal and bird foods 0.00
2185 Soft drinks, cordials, and syrups 0.00
2188 Wine and brandy 0.00
2342 Wool scouring and
top making 0.00
2344 Manmade fiber
broad-woven fabrics 0.00
2345 Cotton yarns and
broad-woven fabrics 1.73
2346 Worsted yams and
broad-woven fabrics 0.00
2347 Woolen yarns and
broad-woven fabrics 0.00
2348 Narrow-woven and
elastic textiles 0.00
2349 Textile finishing 0.00
2351 Household textiles 0.00
2352 Textile floor coverings 0.00
2353 Felt and felt products 0.00
2354 Canvas and associated
products nes 0.00
2355 Rope, cordage, and twine 0.00
2356 Textile products nes 0.95
2441 Hosiery 0.00
2442 Cardigans and pullovers 0.00
2451 Mens' trousers and
shorts; work clothing 0.00
2452 Mens' suits and coats;
waterproof clothing 0.00
2454 Foundation garments 0.00
2456 Headwear and clothing nes 0.00
2460 Footwear 0.00
2533 Veneers and manufactured
boards of wood 0.00
2534 Wooden doors 0.00
2535 Wooden structural fittings
and joinery nes 0.00
2536 Wooden containers 0.00
2537 Hardwood woodchips 0.00
2538 Wood products nes 0.00
2631 Pulp, paper, and paperboard 18.14
2635 Paper products nes 0.00
2643 Paper stationery 0.00
2751 Chemical fertilizers 0.00
2753 Synthetic resins and rubber 6.43
2754 Organic industrial
chemicals nes 3.71
2755 Inorganic industrial chemicals nes 0.00
2762 Paints 37.41
2763 Pharmaceutical and veterinary
products 10.82
2764 Pesticides 47.73
2765 Soap and other detergents 19.04
2766 Cosmetics and toilet preparations 0.00
2767 Inks 0.00
2768 Chemical products nes 3.49
2780 Petroleum and coal products nes 0.00
2850 Glass and glass products 0.00
2861 Clay bricks 0.00
2863 Ceramic tiles and pipes 0.00
2864 Ceramic goods nes 0.00
2871 Cement 0.00
2882 Stone products 0.00
2883 Glass wool and mineral wool
products 0.00
2884 Nonmetallic mineral products nes 0.00
2942 Iron casting 23.83
2961 Aluminum rolling, drawing,
extruding 0.00
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.00
Architectural aluminum products
3142 Architectural aluminum products 0.00
3151 Metal containers 0.15
3161 Cutlery and hand tools nes 0.00
3163 Nuts, bolts, screws and rivets 0.00
3164 Metal coating and finishing 0.00
3165 Nonferrous steam, gas, and water
fittings 70.50
3166 Boiler and plate work 0.00
3232 Motor vehicle bodies, trailers, and
caravans 0.00
3233 Motor vehicle instruments and
electrical equipment nes 0.15
3241 Ships 0.00
3242 Boats 0.00
3243 Railway rolling stock and
locomotives 0.00
3244 Aircraft 1.69
3245 Transport equipment nes 17.14
3341 Photographic and optical goods 0.06
3342 Photographic film processing 0.00
3343 Measuring, professional, and s
scientific equipment nes 36.70
3351 Radio and TV receivers; audio
equipment 0.00
3352 Electronic equipment nes 13.54
3353 Refrigerators and household
appliances 0.91
3354 Water heating systems 0.00
3355 Electric and telephone cable and
wire 0.00
3356 Batteries 0.00
3361 Agricultural machinery 46.60
3362 Construction machinery 50.80
3363 Materials handling equipment 1.72
3364 Wood and metal working machinery 0.53
3365 Pumps and compressors 0.00
3366 Commercial space heating and
cooling equipment 0.00
3367 Dies, saw blades, and machine tool
tool accessories 2.78
3368 Food processing machinery 31.58
3369 Industrial machinery and equipment
nes 16.03
3451 Leather, tanning, and fur dressing 0.04
3452 Leather and leather substitute
goods nes 0.00
3461 Rubber tires, tubes, belts, hose,
and sheet 0.20
3462 Rubber products nes 0.00
3482 Jewelery and silverware 0.00
3483 Brooms and brushes 0.00
3484 Signs and advertising displays 0.00
3486 Writing and marking equipment 0.00
3487 Manufacturing nes 4.87
Total n.a.
Average 4.87
Median 0.00
% of total imports subject to
bindings n.a
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
Total
Imports
Subject
to
Bindings
Effective
in 1991
ASIC Industry Description (Smill.)
Column label
and method of
calculation of
corresponding 8
values (=2 + 4 + 6)
2115 Meat (except small
goods or poultry) 14.8
2116 Poultry 2.0
2117 Bacon, ham and smailgoods nes
2121 Liquid milk and cream
2123 Cheese
2124 Ice cream and frozen confections
2131 Fruit products 7.3
2132 Vegetable products 108.0
2140 Margarine, oils, and fats nes 62.0
2153 Cereal foods and baking mixes 0.3
2161 Bread
2173 Confectionery and cocoa products 64.8
2174 Processed seafoods 216.7
2175 Prepared animal and bird foods
2185 Soft drinks, cordials, and syrups 15.5
2188 Wine and brandy 50.3
2342 Wool scouring and
top making
2344 Manmade fiber
broad-woven fabrics
2345 Cotton yarns and
broad-woven fabrics 11.6
2346 Worsted yams and
broad-woven fabrics
2347 Woolen yarns and
broad-woven fabrics
2348 Narrow-woven and
elastic textiles
2349 Textile finishing
2351 Household textiles
2352 Textile floor coverings 36.6
2353 Felt and felt products
2354 Canvas and associated
products nes
2355 Rope, cordage, and twine
2356 Textile products nes 35.5
2441 Hosiery
2442 Cardigans and pullovers
2451 Mens' trousers and
shorts; work clothing
2452 Mens' suits and coats;
waterproof clothing
2454 Foundation garments
2456 Headwear and clothing nes 56.1
2460 Footwear
2533 Veneers and manufactured
boards of wood 9.8
2534 Wooden doors
2535 Wooden structural fittings
and joinery nes
2536 Wooden containers
2537 Hardwood woodchips
2538 Wood products nes
2631 Pulp, paper, and paperboard 196.0
2635 Paper products nes 3.0
2643 Paper stationery
2751 Chemical fertilizers 2.4
2753 Synthetic resins and rubber 40.6
2754 Organic industrial
chemicals nes 54.4
2755 Inorganic industrial chemicals nes 10.2
2762 Paints 28.0
2763 Pharmaceutical and veterinary
products 167.5
2764 Pesticides 36.8
2765 Soap and other detergents 52.7
2766 Cosmetics and toilet preparations 132.6
2767 Inks
2768 Chemical products nes 13.5
2780 Petroleum and coal products nes
2850 Glass and glass products 75.7
2861 Clay bricks
2863 Ceramic tiles and pipes
2864 Ceramic goods nes
2871 Cement
2882 Stone products
2883 Glass wool and mineral wool
products
2884 Nonmetallic mineral products nes 2.6
2942 Iron casting 1.8
2961 Aluminum rolling, drawing,
extruding
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.3
Architectural aluminum products
3142 Architectural aluminum products
3151 Metal containers 0.1
3161 Cutlery and hand tools nes 41.3
3163 Nuts, bolts, screws and rivets
3164 Metal coating and finishing
3165 Nonferrous steam, gas, and water
fittings 135.5
3166 Boiler and plate work
3232 Motor vehicle bodies, trailers, and
caravans
3233 Motor vehicle instruments and
electrical equipment nes 125.5
3241 Ships
3242 Boats
3243 Railway rolling stock and
locomotives 22.5
3244 Aircraft 2026.8
3245 Transport equipment nes 48.1
3341 Photographic and optical goods 364.8
3342 Photographic film processing
3343 Measuring, professional, and s
scientific equipment nes 642.5
3351 Radio and TV receivers; audio
equipment
3352 Electronic equipment nes 1803.2
3353 Refrigerators and household
appliances 409.3
3354 Water heating systems 5.4
3355 Electric and telephone cable and
wire 24.8
3356 Batteries
3361 Agricultural machinery 218.9
3362 Construction machinery 344.3
3363 Materials handling equipment 36.0
3364 Wood and metal working machinery 8.9
3365 Pumps and compressors 429.7
3366 Commercial space heating and
cooling equipment
3367 Dies, saw blades, and machine tool
tool accessories 7.8
3368 Food processing machinery 98.3
3369 Industrial machinery and equipment
nes 1200.0
3451 Leather, tanning, and fur dressing 0.0
3452 Leather and leather substitute
goods nes
3461 Rubber tires, tubes, belts, hose,
and sheet 7.4
3462 Rubber products nes
3482 Jewelery and silverware 142.4
3483 Brooms and brushes 26.5
3484 Signs and advertising displays
3486 Writing and marking equipment
3487 Manufacturing nes 7.8
Total 9687.2
Average --
Median --
% of total imports subject to
bindings 29.91
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
% of
Total
Imports
Subject
to
Bindings
Effective
ASIC Industry Description in 1991
Column label
and method of
calculation of
corresponding 9
values (=8/1)
2115 Meat (except small
goods or poultry) 36.54
2116 Poultry 22.01
2117 Bacon, ham and smailgoods nes 0.00
2121 Liquid milk and cream 0.00
2123 Cheese 0.00
2124 Ice cream and frozen confections 0.00
2131 Fruit products 7.22
2132 Vegetable products 52.85
2140 Margarine, oils, and fats nes 39.41
2153 Cereal foods and baking mixes 0.55
2161 Bread 0.00
2173 Confectionery and cocoa products 40.72
2174 Processed seafoods 54.47
2175 Prepared animal and bird foods 0.00
2185 Soft drinks, cordials, and syrups 8.27
2188 Wine and brandy 66.11
2342 Wool scouring and
top making 0.00
2344 Manmade fiber
broad-woven fabrics 0.00
2345 Cotton yarns and
broad-woven fabrics 2.62
2346 Worsted yams and
broad-woven fabrics 0.00
2347 Woolen yarns and
broad-woven fabrics 0.00
2348 Narrow-woven and
elastic textiles 0.00
2349 Textile finishing 0.00
2351 Household textiles 0.00
2352 Textile floor coverings 34.45
2353 Felt and felt products 0.00
2354 Canvas and associated
products nes 0.00
2355 Rope, cordage, and twine 0.00
2356 Textile products nes 9.36
2441 Hosiery 0.00
2442 Cardigans and pullovers 0.00
2451 Mens' trousers and
shorts; work clothing 0.00
2452 Mens' suits and coats;
waterproof clothing 0.00
2454 Foundation garments 0.00
2456 Headwear and clothing nes 31.36
2460 Footwear 0.00
2533 Veneers and manufactured
boards of wood 10.66
2534 Wooden doors 0.00
2535 Wooden structural fittings
and joinery nes 0.00
2536 Wooden containers 0.00
2537 Hardwood woodchips 0.00
2538 Wood products nes 0.00
2631 Pulp, paper, and paperboard 18.14
2635 Paper products nes 3.19
2643 Paper stationery 0.00
2751 Chemical fertilizers 0.85
2753 Synthetic resins and rubber 6.47
2754 Organic industrial
chemicals nes 4.58
2755 Inorganic industrial chemicals nes 1.30
2762 Paints 37.41
2763 Pharmaceutical and veterinary
products 16.63
2764 Pesticides 68.82
2765 Soap and other detergents 77.93
2766 Cosmetics and toilet preparations 99.55
2767 Inks 0.00
2768 Chemical products nes 3.69
2780 Petroleum and coal products nes 0.00
2850 Glass and glass products 30.53
2861 Clay bricks 0.00
2863 Ceramic tiles and pipes 0.00
2864 Ceramic goods nes 0.00
2871 Cement 0.00
2882 Stone products 0.00
2883 Glass wool and mineral wool
products 0.00
2884 Nonmetallic mineral products nes 7.28
2942 Iron casting 24.58
2961 Aluminum rolling, drawing,
extruding 0.00
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.04
Architectural aluminum products
3142 Architectural aluminum products 0.00
3151 Metal containers 0.15
3161 Cutlery and hand tools nes 14.77
3163 Nuts, bolts, screws and rivets 0.00
3164 Metal coating and finishing 0.00
3165 Nonferrous steam, gas, and water
fittings 70.50
3166 Boiler and plate work 0.00
3232 Motor vehicle bodies, trailers, and
caravans 0.00
3233 Motor vehicle instruments and
electrical equipment nes 40.08
3241 Ships 0.00
3242 Boats 0.00
3243 Railway rolling stock and
locomotives 76.63
3244 Aircraft 77.18
3245 Transport equipment nes 27.00
3341 Photographic and optical goods 47.28
3342 Photographic film processing 0.00
3343 Measuring, professional, and s
scientific equipment nes 49.05
3351 Radio and TV receivers; audio
equipment 0.00
3352 Electronic equipment nes 37.70
3353 Refrigerators and household
appliances 48.68
3354 Water heating systems 63.07
3355 Electric and telephone cable and
wire 17.13
3356 Batteries 0.00
3361 Agricultural machinery 59.96
3362 Construction machinery 52.89
3363 Materials handling equipment 11.27
3364 Wood and metal working machinery 2.14
3365 Pumps and compressors 99.32
3366 Commercial space heating and
cooling equipment 0.00
3367 Dies, saw blades, and machine tool
tool accessories 4.33
3368 Food processing machinery 31.59
3369 Industrial machinery and equipment
nes 44.44
3451 Leather, tanning, and fur dressing 0.04
3452 Leather and leather substitute
goods nes 0.00
3461 Rubber tires, tubes, belts, hose,
and sheet 1.39
3462 Rubber products nes 0.00
3482 Jewelery and silverware 45.87
3483 Brooms and brushes 75.15
3484 Signs and advertising displays 0.00
3486 Writing and marking equipment 0.00
3487 Manufacturing nes 5.39
Total n.a.
Average 16.70
Median 0.15
% of total imports subject to
bindings n.a.
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
Total
Imports
Subject
to
"Active"
Bindings
in 1991
ASIC Industry Description ($mill.)
Column label
and method of
calculation of
corresponding
values 10 (a)
2115 Meat (except small
goods or poultry) 8.1
2116 Poultry 0.0
2117 Bacon, ham and smailgoods nes
2121 Liquid milk and cream
2123 Cheese
2124 Ice cream and frozen confections
2131 Fruit products 5.3
2132 Vegetable products 64.5
2140 Margarine, oils, and fats nes 24.1
2153 Cereal foods and baking mixes 0.3
2161 Bread
2173 Confectionery and cocoa products 64.8
2174 Processed seafoods 216.7
2175 Prepared animal and bird foods
2185 Soft drinks, cordials, and syrups 0.0
2188 Wine and brandy 50.3
2342 Wool scouring and
top making
2344 Manmade fiber
broad-woven fabrics
2345 Cotton yarns and
broad-woven fabrics 7.7
2346 Worsted yams and
broad-woven fabrics
2347 Woolen yarns and
broad-woven fabrics
2348 Narrow-woven and
elastic textiles
2349 Textile finishing
2351 Household textiles
2352 Textile floor coverings 22.8
2353 Felt and felt products
2354 Canvas and associated
products nes
2355 Rope, cordage, and twine
2356 Textile products nes 13.8
2441 Hosiery
2442 Cardigans and pullovers
2451 Mens' trousers and
shorts; work clothing
2452 Mens' suits and coats;
waterproof clothing
2454 Foundation garments
2456 Headwear and clothing nes 15.6
2460 Footwear
2533 Veneers and manufactured
boards of wood 9.8
2534 Wooden doors
2535 Wooden structural fittings
and joinery nes
2536 Wooden containers
2537 Hardwood woodchips
2538 Wood products nes
2631 Pulp, paper, and paperboard 55.4
2635 Paper products nes 3.0
2643 Paper stationery
2751 Chemical fertilizers 2.4
2753 Synthetic resins and rubber 40.6
2754 Organic industrial
chemicals nes 49.4
2755 Inorganic industrial chemicals nes 7.5
2762 Paints 28.0
2763 Pharmaceutical and veterinary
products 167.5
2764 Pesticides 36.8
2765 Soap and other detergents 52.7
2766 Cosmetics and toilet preparations 132.6
2767 Inks
2768 Chemical products nes 13.4
2780 Petroleum and coal products nes
2850 Glass and glass products 45.3
2861 Clay bricks
2863 Ceramic tiles and pipes
2864 Ceramic goods nes
2871 Cement
2882 Stone products
2883 Glass wool and mineral wool
products
2884 Nonmetallic mineral products nes 0.6
2942 Iron casting 1.8
2961 Aluminum rolling, drawing,
extruding
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.3
Architectural aluminum products
3142 Architectural aluminum products
3151 Metal containers 0.1
3161 Cutlery and hand tools nes 2.7
3163 Nuts, bolts, screws and rivets
3164 Metal coating and finishing
3165 Nonferrous steam, gas, and water
fittings 135.5
3166 Boiler and plate work
3232 Motor vehicle bodies, trailers, and
caravans
3233 Motor vehicle instruments and
electrical equipment nes 124.8
3241 Ships
3242 Boats
3243 Railway rolling stock and
locomotives 22.5
3244 Aircraft 65.1
3245 Transport equipment nes 4.0
3341 Photographic and optical goods 332.9
3342 Photographic film processing
3343 Measuring, professional, and s
scientific equipment nes 642.5
3351 Radio and TV receivers; audio
equipment
3352 Electronic equipment nes 1789.3
3353 Refrigerators and household
appliances 196.0
3354 Water heating systems 1.0
3355 Electric and telephone cable and
wire 24.8
3356 Batteries
3361 Agricultural machinery 215.0
3362 Construction machinery 341.2
3363 Materials handling equipment 29.4
3364 Wood and metal working machinery 8.9
3365 Pumps and compressors 394.2
3366 Commercial space heating and
cooling equipment
3367 Dies, saw blades, and machine tool
tool accessories 5.0
3368 Food processing machinery 98.3
3369 Industrial machinery and equipment
nes 840.6
3451 Leather, tanning, and fur dressing 0.0
3452 Leather and leather substitute
goods nes
3461 Rubber tires, tubes, belts, hose,
and sheet 1.1
3462 Rubber products nes
3482 Jewelery and silverware 108.7
3483 Brooms and brushes 8.7
3484 Signs and advertising displays
3486 Writing and marking equipment
3487 Manufacturing nes 7.4
Total 6540.3
Average --
Median --
% of total imports subject to
bindings 20.19
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
% of
Total
Imports
Subject
to
Bindings
Effective
in 1991
That Are
ASIC Industry Description "Active"
Column label
and method of
calculation of
corresponding 11 (a)
values (=10/8)
2115 Meat (except small
goods or poultry) 54.66
2116 Poultry 0.00
2117 Bacon, ham and smailgoods nes
2121 Liquid milk and cream
2123 Cheese
2124 Ice cream and frozen confections
2131 Fruit products 73.09
2132 Vegetable products 59.71
2140 Margarine, oils, and fats nes 38.90
2153 Cereal foods and baking mixes 100.00
2161 Bread
2173 Confectionery and cocoa products 100.00
2174 Processed seafoods 100.00
2175 Prepared animal and bird foods
2185 Soft drinks, cordials, and syrups 0.00
2188 Wine and brandy 100.0
2342 Wool scouring and
top making
2344 Manmade fiber
broad-woven fabrics
2345 Cotton yarns and
broad-woven fabrics 65.98
2346 Worsted yams and
broad-woven fabrics
2347 Woolen yarns and
broad-woven fabrics
2348 Narrow-woven and
elastic textiles
2349 Textile finishing
2351 Household textiles
2352 Textile floor coverings 62.21
2353 Felt and felt products
2354 Canvas and associated
products nes
2355 Rope, cordage, and twine
2356 Textile products nes 38.78
2441 Hosiery
2442 Cardigans and pullovers
2451 Mens' trousers and
shorts; work clothing
2452 Mens' suits and coats;
waterproof clothing
2454 Foundation garments
2456 Headwear and clothing nes 27.79
2460 Footwear
2533 Veneers and manufactured
boards of wood 100.00
2534 Wooden doors
2535 Wooden structural fittings
and joinery nes
2536 Wooden containers
2537 Hardwood woodchips
2538 Wood products nes
2631 Pulp, paper, and paperboard 28.25
2635 Paper products nes 100.00
2643 Paper stationery
2751 Chemical fertilizers 100.00
2753 Synthetic resins and rubber 100.00
2754 Organic industrial
chemicals nes 90.70
2755 Inorganic industrial chemicals nes 73.09
2762 Paints 100.00
2763 Pharmaceutical and veterinary
products 100.00
2764 Pesticides 100.00
2765 Soap and other detergents 100.00
2766 Cosmetics and toilet preparations 100.00
2767 Inks
2768 Chemical products nes 98.79
2780 Petroleum and coal products nes
2850 Glass and glass products 59.83
2861 Clay bricks
2863 Ceramic tiles and pipes
2864 Ceramic goods nes
2871 Cement
2882 Stone products
2883 Glass wool and mineral wool
products
2884 Nonmetallic mineral products nes 21.98
2942 Iron casting 100.00
2961 Aluminum rolling, drawing,
extruding
2962 Nonferrous metals: nes, rolling,
drawing, extruding 100.00
Architectural aluminum products
3142 Architectural aluminum products
3151 Metal containers 100.00
3161 Cutlery and hand tools nes 6.48
3163 Nuts, bolts, screws and rivets
3164 Metal coating and finishing
3165 Nonferrous steam, gas, and water
fittings 100.00
3166 Boiler and plate work
3232 Motor vehicle bodies, trailers, and
caravans
3233 Motor vehicle instruments and
electrical equipment nes 99.44
3241 Ships
3242 Boats
3243 Railway rolling stock and
locomotives 100.00
3244 Aircraft 3.21
3245 Transport equipment nes 8.28
3341 Photographic and optical goods 91.26
3342 Photographic film processing
3343 Measuring, professional, and s
scientific equipment nes 100.00
3351 Radio and TV receivers; audio
equipment
3352 Electronic equipment nes 99.23
3353 Refrigerators and household
appliances 47.90
3354 Water heating systems 17.65
3355 Electric and telephone cable and
wire 100.00
3356 Batteries
3361 Agricultural machinery 98.22
3362 Construction machinery 99.09
3363 Materials handling equipment 81.60
3364 Wood and metal working machinery 100.00
3365 Pumps and compressors 91.73
3366 Commercial space heating and
cooling equipment
3367 Dies, saw blades, and machine tool
tool accessories 64.30
3368 Food processing machinery 100.00
3369 Industrial machinery and equipment
nes 70.05
3451 Leather, tanning, and fur dressing 100.00
3452 Leather and leather substitute
goods nes
3461 Rubber tires, tubes, belts, hose,
and sheet 14.46
3462 Rubber products nes
3482 Jewelery and silverware 76.33
3483 Brooms and brushes 32.76
3484 Signs and advertising displays
3486 Writing and marking equipment
3487 Manufacturing nes 94.14
Total n.a.
Average 73.51
Median --
% of total imports subject to
bindings n.a.
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
% of
Total
Imports
Subject
to
"Active"
Bindings
ASIC Industry Description in 1991
Column label
and method of
calculation of
corresponding 12 (a)
values (=10/1)
2115 Meat (except small
goods or poultry) 19.97
2116 Poultry 0.00
2117 Bacon, ham and smailgoods nes 0.00
2121 Liquid milk and cream 0.00
2123 Cheese 0.00
2124 Ice cream and frozen confections 0.00
2131 Fruit products 5.28
2132 Vegetable products 31.55
2140 Margarine, oils, and fats nes 15.33
2153 Cereal foods and baking mixes 0.55
2161 Bread 0.00
2173 Confectionery and cocoa products 40.72
2174 Processed seafoods 54.47
2175 Prepared animal and bird foods 0.00
2185 Soft drinks, cordials, and syrups 0.00
2188 Wine and brandy 66.11
2342 Wool scouring and
top making 0.00
2344 Manmade fiber
broad-woven fabrics 0.00
2345 Cotton yarns and
broad-woven fabrics 1.73
2346 Worsted yams and
broad-woven fabrics 0.00
2347 Woolen yarns and
broad-woven fabrics 0.00
2348 Narrow-woven and
elastic textiles 0.00
2349 Textile finishing 0.00
2351 Household textiles 0.00
2352 Textile floor coverings 21.43
2353 Felt and felt products 0.00
2354 Canvas and associated
products nes 0.00
2355 Rope, cordage, and twine 0.00
2356 Textile products nes 3.63
2441 Hosiery 0.00
2442 Cardigans and pullovers 0.00
2451 Mens' trousers and
shorts; work clothing 0.00
2452 Mens' suits and coats;
waterproof clothing 0.00
2454 Foundation garments 0.00
2456 Headwear and clothing nes 8.71
2460 Footwear 0.00
2533 Veneers and manufactured
boards of wood 10.66
2534 Wooden doors 0.00
2535 Wooden structural fittings
and joinery nes 0.00
2536 Wooden containers 0.00
2537 Hardwood woodchips 0.00
2538 Wood products nes 0.00
2631 Pulp, paper, and paperboard 5.12
2635 Paper products nes 3.19
2643 Paper stationery 0.00
2751 Chemical fertilizers 0.85
2753 Synthetic resins and rubber 6.47
2754 Organic industrial
chemicals nes 4.15
2755 Inorganic industrial chemicals nes 0.95
2762 Paints 37.41
2763 Pharmaceutical and veterinary
products 16.63
2764 Pesticides 68.82
2765 Soap and other detergents 77.93
2766 Cosmetics and toilet preparations 99.55
2767 Inks 0.00
2768 Chemical products nes 3.65
2780 Petroleum and coal products nes 0.00
2850 Glass and glass products 18.27
2861 Clay bricks 0.00
2863 Ceramic tiles and pipes 0.00
2864 Ceramic goods nes 0.00
2871 Cement 0.00
2882 Stone products 0.00
2883 Glass wool and mineral wool
products 0.00
2884 Nonmetallic mineral products nes 1.60
2942 Iron casting 24.58
2961 Aluminum rolling, drawing,
extruding 0.00
2962 Nonferrous metals: nes, rolling,
drawing, extruding 0.04
Architectural aluminum products
3142 Architectural aluminum products 0.00
3151 Metal containers 0.15
3161 Cutlery and hand tools nes 0.96
3163 Nuts, bolts, screws and rivets 0.00
3164 Metal coating and finishing 0.00
3165 Nonferrous steam, gas, and water
fittings 70.50
3166 Boiler and plate work 0.00
3232 Motor vehicle bodies, trailers, and
caravans 0.00
3233 Motor vehicle instruments and
electrical equipment nes 39.86
3241 Ships 0.00
3242 Boats 0.00
3243 Railway rolling stock and
locomotives 76.63
3244 Aircraft 2.48
3245 Transport equipment nes 2.23
3341 Photographic and optical goods 43.14
3342 Photographic film processing 0.00
3343 Measuring, professional, and s
scientific equipment nes 49.05
3351 Radio and TV receivers; audio
equipment 0.00
3352 Electronic equipment nes 37.41
3353 Refrigerators and household
appliances 23.32
3354 Water heating systems 11.13
3355 Electric and telephone cable and
wire 17.13
3356 Batteries 0.00
3361 Agricultural machinery 58.89
3362 Construction machinery 52.41
3363 Materials handling equipment 9.20
3364 Wood and metal working machinery 2.14
3365 Pumps and compressors 91.11
3366 Commercial space heating and
cooling equipment 0.00
3367 Dies, saw blades, and machine tool
tool accessories 2.78
3368 Food processing machinery 31.59
3369 Industrial machinery and equipment
nes 31.13
3451 Leather, tanning, and fur dressing 0.04
3452 Leather and leather substitute
goods nes 0.00
3461 Rubber tires, tubes, belts, hose,
and sheet 0.20
3462 Rubber products nes 0.00
3482 Jewelery and silverware 35.02
3483 Brooms and brushes 24.62
3484 Signs and advertising displays 0.00
3486 Writing and marking equipment 0.00
3487 Manufacturing nes 5.07
Total n.a.
Average 12.55
Median 0.04
% of total imports subject to
bindings n.a.
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) n.a.
Portion of
Corresponding
HS6 Records
with "Active"
ASIC Industry Description Bindings
Column label
and method of
calculation of
corresponding
values 13 (a,b)
2115 Meat (except small
goods or poultry) 1.9
2116 Poultry 0.0
2117 Bacon, ham and smailgoods nes 0.0
2121 Liquid milk and cream 0.0
2123 Cheese 0.0
2124 Ice cream and frozen confections 0.0
2131 Fruit products 7.9
2132 Vegetable products 25.5
2140 Margarine, oils, and fats nes 29.1
2153 Cereal foods and baking mixes 4.5
2161 Bread 0.0
2173 Confectionery and cocoa products 26.7
2174 Processed seafoods 69.0
2175 Prepared animal and bird foods 0.0
2185 Soft drinks, cordials, and syrups 0.0
2188 Wine and brandy 55.6
2342 Wool scouring and
top making 0.0
2344 Manmade fiber
broad-woven fabrics 0.0
2345 Cotton yarns and
broad-woven fabrics 1.8
2346 Worsted yams and
broad-woven fabrics 0.0
2347 Woolen yarns and
broad-woven fabrics 0.0
2348 Narrow-woven and
elastic textiles 0.0
2349 Textile finishing 0.0
2351 Household textiles 0.0
2352 Textile floor coverings 47.6
2353 Felt and felt products 0.0
2354 Canvas and associated
products nes 0.0
2355 Rope, cordage, and twine 0.0
2356 Textile products nes 15.7
2441 Hosiery 0.0
2442 Cardigans and pullovers 0.0
2451 Mens' trousers and
shorts; work clothing 0.0
2452 Mens' suits and coats;
waterproof clothing 0.0
2454 Foundation garments 0.0
2456 Headwear and clothing nes 1.1
2460 Footwear 0.0
2533 Veneers and manufactured
boards of wood 10.0
2534 Wooden doors 0.0
2535 Wooden structural fittings
and joinery nes 0.0
2536 Wooden containers 0.0
2537 Hardwood woodchips 0.0
2538 Wood products nes 0.0
2631 Pulp, paper, and paperboard 10.7
2635 Paper products nes 4.0
2643 Paper stationery 0.0
2751 Chemical fertilizers 7.7
2753 Synthetic resins and rubber 4.1
2754 Organic industrial
chemicals nes 2.3
2755 Inorganic industrial chemicals nes 2.4
2762 Paints 13.3
2763 Pharmaceutical and veterinary
products 28.6
2764 Pesticides 50.0
2765 Soap and other detergents 64.3
2766 Cosmetics and toilet preparations 93.3
2767 Inks 0.0
2768 Chemical products nes 3.4
2780 Petroleum and coal products nes 0.0
2850 Glass and glass products 13.2
2861 Clay bricks 0.0
2863 Ceramic tiles and pipes 0.0
2864 Ceramic goods nes 0.0
2871 Cement 0.0
2882 Stone products 0.0
2883 Glass wool and mineral wool
products 0.0
2884 Nonmetallic mineral products nes 6.7
2942 Iron casting 50.0
2961 Aluminum rolling, drawing,
extruding 0.0
2962 Nonferrous metals: nes, rolling,
drawing, extruding 2.7
Architectural aluminum products
3142 Architectural aluminum products 0.0
3151 Metal containers 14.3
3161 Cutlery and hand tools nes 2.0
3163 Nuts, bolts, screws and rivets 0.0
3164 Metal coating and finishing 0.0
3165 Nonferrous steam, gas, and water
fittings 10.0
3166 Boiler and plate work 0.0
3232 Motor vehicle bodies, trailers, and
caravans 0.0
3233 Motor vehicle instruments and
electrical equipment nes 44.0
3241 Ships 0.0
3242 Boats 0.0
3243 Railway rolling stock and
locomotives 31.8
3244 Aircraft 21.4
3245 Transport equipment nes 6.7
3341 Photographic and optical goods 48.2
3342 Photographic film processing 0.0
3343 Measuring, professional, and s
scientific equipment nes 29.9
3351 Radio and TV receivers; audio
equipment 0.0
3352 Electronic equipment nes 23.0
3353 Refrigerators and household
appliances 16.9
3354 Water heating systems 25.0
3355 Electric and telephone cable and
wire 15.4
3356 Batteries 0.0
3361 Agricultural machinery 31.9
3362 Construction machinery 53.7
3363 Materials handling equipment 11.4
3364 Wood and metal working machinery 6.5
3365 Pumps and compressors 81.3
3366 Commercial space heating and
cooling equipment 0.0
3367 Dies, saw blades, and machine tool
tool accessories 3.1
3368 Food processing machinery 15.4
3369 Industrial machinery and equipment
nes 71.4
3451 Leather, tanning, and fur dressing 2.5
3452 Leather and leather substitute
goods nes 0.0
3461 Rubber tires, tubes, belts, hose,
and sheet 3.7
3462 Rubber products nes 0.0
3482 Jewelery and silverware 28.0
3483 Brooms and brushes 33.3
3484 Signs and advertising displays 0.0
3486 Writing and marking equipment 0.0
3487 Manufacturing nes 3.7
Total n.a.
Average 11.3
Median 1.3
% of total imports subject to
bindings n.a.
% of total HS6 records subject
to bindings (b) n.a.
% of total HS6 records subject to
"active" bindings (a,b) 12.1
n.a. denotes not applicable.
(a)Active bindings represent all instances in which the bound tariff
rate is equal to the applied tariff rate.
(b)HS6 represents the Harmonized six-digit index.
Table 2
Regressors of Model Equations
Tariff Equation (a) Regressor
Import penetration Nominal imports as a % of domestic
consumption defined as domestic
production (turnover) plus net
imports
[DELTA](import penetration) Import penetration in 1990/1991
minus import penetration in
1981/1982
Exports Exports as a percentage of turnover
Concentration Four firm concentration ratio
(output of the four largest firms
as a % of aggregate industry
output)
Establishments Number of establishments scaled by
industry turnover
Capital stock Value of total industry assets in
fiscal year 1989/1990
Industry growth Change in turnover from 1981/1982
to 1990/1991 as a % of turnover in
1981/1982
Geographic concentration Index of employment concentration
across the eight Australian States
and Territories given by:
[[SIGMA].sup.8.sub.i=1]
[Emp.sub.i]/
[[SIGMA].sup.8.sub.j=1]
[Emp.sub.j] -- [Pop.sub.i]/
[[SIGMA].sup.8.sub.j=1]
[Pop.sub.j]/ where [Pop.sub.i]
([Emp.sub.i] corresponds to the
population (number of workers in a
given industry) residing
(employed) in state or territory
i.
Employment size Unscaled number of workers in
industry
White-collar workers (b) % of managers and professionals in
aggregate industry employment
Semiskilled workers (b) % of paraprofessionals,
tradespersons, clerks,
salespersons, and personal service
workers in aggregate industry
employment
Production workers (b) % of laborers and related workers
in aggregate industry employment
Import equation (a)
Tariff Nominal (unweighted) average
tariff in 1991
Capital intensity Value of total assets of fiscal
year 1989/1990 scaled by tumover
of 1990/1991
Labor intensity Gross wages and salaries scaled
by turnover
(a)Unless otherwise indicated, the relevant observations correspond to
fiscal year 1990/1991
(b)To avoid a collinear relationship between variables, one occupational
category (operators and drivers) was dropped. The data used to construct
these variables were extracted from the 1991 census
Table 3
Estimated Model Coefficients
OLS (a) 2SLS (a)
Coefficient t-statistic Coefficient
Tariff Equation
Constant 59.1817 * 5.693 70.8261 *
Import penetration 0.0463 1.470 0.2220 **
[DELTA](import penetration) -0.0206 -0.287 -0.5l09 **
Exports -0.0922 * -7.495 -0.0789 **
Concentration -0.1558 * -2.750 -0.l417 ***
Establishments -0.0305 -1.388 -0.0447
Capital stock -0.0088 * -4.293 -0.0090 *
Industry growth 0.0017 0.190 -0.0110
Geographic concentration 7.5812 ** 2.159 3.2492
Employment size 0.0006 *** 2.083 0.0006 **
White-collar workers -0.6677 * -3.765 -0.8509 *
Semiskilled workers -0.3838 * -3.873 -0.5198 *
Production workers -0.5515 * -4.787 -0.6299 *
[R.sup.2] 0.49 0.28
Import equation
Constant 7.2681 0.831 8.5669
Tariff -0.1781 -0.874 -0.4863
Capital intensity 7.1282 0.836 6.4852
Labor intensity 90.4130 ** 2.437 108.8124 *
[R.sup.2] 0.04 0.04 0.02
2SLS (a) 3SLS
t-statistic Coefficient t-statistic
Tariff Equation
Constant 5.543 70.9284 * 6.954
Import penetration 2.070 0.2203 ** 2.019
[DELTA](import penetration) -2.053 -0.5128 ** -2.168
Exports -2.572 -0.0789 ** -2.140
Concentration -1.914 -0.1413 ** -2.355
Establishments -1.572 -0.0446 -1.491
Capital stock -3.625 -0.0089 * -3.372
Industry growth -0.743 -0.0110 -0.698
Geographic concentration 0.658 3.2196 0.791
Employment size 2.002 0.0006 *** 1.799
White-collar workers -3.573 -0.8534 * -3.670
Semiskilled workers -3.975 -0.5199 * -4.890
Production workers -4.166 -0.6301 * -5.212
[R.sup.2] 0.39 (b)
Import equation
Constant 0.964 8.5480 0.998
Tariff -1.563 -0.4879 *** -1.664
Capital intensity 0.730 6.5116 1.048
Labor intensity 2.834 108.9241 * 2.833
[R.sup.2] 0.39 (b)
(a)Heteroskedasticity correction of the covariance matrix, using the
method proposed by White (1980) and Greene (1997).
(b)Berndt's (1991, p. 468) generalized R-squared. Significance is given
at the
*, 1%
**, 5%
***, 10% levels, with a two-tailed test.
Table 4
Sensitivity Analysis
Sign
Reversal
Likelihood in OLS
Specification Ratio Test (c) Estimations
Unconstrained model n.a. n.a.
Omitted regressor in tariff
equation
[DELTA](import penetration) -35.58 **
Exports (a) 49.77 * --
Concentration 12.02 * --
Establishments -6.21 **
Capital stock (b) 3.02 --
Industry growth 5.61 ** **
Geographic concentration 11.80 * --
Employment size (c) 2.87 **
White-collar workers 43.74 * --
Semiskilled workers 0.10 --
Production workers 35.52 * --
Omitted peripheral instruments (d) 107.49 * n.a.
Nonomitted regressor in tariff
equation
(import penetration) n.a. **
Nonomitted regressor in import
equation
Tariff n.a. n.a.
Capital intensity n.a. n.a.
Labor intensity n.a. n.a.
Sign
Reversal
in 3SLS
Specification Estimations [[beta].sup.3SLS.sub.M]
Unconstrained model n.a. 0.22
Omitted regressor in tariff
equation
[DELTA](import penetration) -- 0.07
Exports (a) -- 0.16
Concentration -- 0.24
Establishments -- 0.20
Capital stock (b) -- 0.22
Industry growth ** 0.24
Geographic concentration -- 0.27
Employment size (c) ** 0.28
White-collar workers -- 0.21
Semiskilled workers -- 0.08
Production workers -- 0.33
Omitted peripheral instruments (d) -- 0.14
Nonomitted regressor in tariff
equation
(import penetration) -- n.a.
Nonomitted regressor in import
equation
Tariff -- n.a.
Capital intensity -- n.a.
Labor intensity -- n.a.
[[beta].sup.3SLS.sub.M]/
Specification [[beta].sup.OLS.sub.M]
Unconstrained model 4.75
Omitted regressor in tariff
equation
[DELTA](import penetration) 1.61
Exports (a) 6.80
Concentration 4.02
Establishments 4.89
Capital stock (b) 4.27
Industry growth 5.27
Geographic concentration 3.44
Employment size (c) 5.89
White-collar workers -22.37
Semiskilled workers -35.84
Production workers 9.12
Omitted peripheral instruments (d) 3.09
Nonomitted regressor in tariff
equation
(import penetration) n.a.
Nonomitted regressor in import
equation
Tariff n.a.
Capital intensity n.a.
Labor intensity n.a.
Specification [[beta].sup.3SLS.sub.T]
Unconstrained model -0.49
Omitted regressor in tariff
equation
[DELTA](import penetration) -0.50
Exports (a) -0.43
Concentration -0.59
Establishments -0.46
Capital stock (b) -0.54
Industry growth -0.49
Geographic concentration -0.53
Employment size (c) -0.46
White-collar workers -0.33
Semiskilled workers -0.47
Production workers -0.45
Omitted peripheral instruments (d) -0.58
Nonomitted regressor in tariff
equation
(import penetration) n.a.
Nonomitted regressor in import
equation
Tariff n.a.
Capital intensity n.a.
Labor intensity n.a.
[[beta].sup.3SLS.sub.T]/
Specification [[beta].sup.OLS.sub.T]
Unconstrained model 2.74
Omitted regressor in tariff
equation
[DELTA](import penetration) 2.80
Exports (a) 2.40
Concentration 3.30
Establishments 2.58
Capital stock (b) 3.03
Industry growth 2.76
Geographic concentration 2.96
Employment size (c) 2.59
White-collar workers 1.83
Semiskilled workers 2.64
Production workers 2.54
Omitted peripheral instruments (d) 3.26
Nonomitted regressor in tariff
equation
(import penetration) n.a.
Nonomitted regressor in import
equation
Tariff n.a.
Capital intensity n.a.
Labor intensity n.a.
The first section of this table provides information derived from the
unconstrained simultaneous model estimated using 3SLS and OLS. Each row
of the second section represents a different model specification in
which the explanatory variable identified in the row, and any associated
instrumental variable(s), is (are) omitted from the tariff equation in
3SLS and OLS estimations (this section summarizes the results of 11
specifications). The third section corresponds to a specification that
entails dropping all peripheral instruments. If in at least one of these
specifications, estimated via 3SLS and OLS, a variable exhibits sign
reversal, this is indicated with an "**" in the appropriate column. n.a.
denotes not applicable. The key pertaining to the various superscripts
in this table follows. Significance is given at the *, 1% and **, 10%
levels, with a two-tailed test.
(a)Related instrumental variables EXP82 and EXP91 were also excluded
from the estimations.
(b)Related instrumental variable CURASS90 was also excluded from the
estimations.
(c)Related instrumental variables EMP90 and EMPQLD were also excluded
from the estimations.
(d)These include EXP82, EXP91, EMP90, EMPQLD, CURASS90, LACOST90,
TURN82, and GP92.
(e)Performed using the log-likelihood values of the 3SLS estimation of
the tariff equation corresponding to the constrained and unconstrained
models.
*[Unreadable in original source]
Received September 2000; accepted July 2002. (1.) For a historical overview of Australian import tariff policy, see Woodland (1992), Capling and Galligan (1992), and Corden (1996). (2.) By 1970, Australia assumed the unenviable position of one of the two most heavily protected industrialized nations, the other being New Zealand. For a relevant discussion, see Anderson and Garnaut (1986, p. 162). (3.) See the Trade Assistance Review supplement of the Productivity Commission's Annual Report far 1999. (4.) Italics added for clarity. (5.) See Anderson (1995) for a relevant discussion. (6.) See Tutlock (1967), Brock and Magee (1978), Findlay and Wellisz (1982), Mayer (1984), Baldwin (1985), Hillman (1989), Magee, Brock, and Young (1989), and Grossman and Helpman (1994). For a succinct review of the literature, see Tombazos (2001). (7.) The relevant literature that examines the theoretical underpinnings of this relationship is discussed in a forthcoming section. (8.) Treller (1993, p. 139) registers a similar observation in the case of research that used U.S. data. (9.) As far as I know these are the only three implementations of this analytical framework. Focusing on the country-specific applications of Ray (1981b) and Trefler (1993), it may be useful to note that although the former did not find NTBs to have any concurrent effect on imports, the latter did not measure a statistically significant impact of imports on NTBs. (10.) Given the emphasis of the study on bidirectional causation between tariffs and imports, unweighted tariffs are a preferable measure of the dependent variable of Equation 1, compared with the corresponding imports-weighted tariff rate. It may be useful to note that the simple correlation coefficient between the two variables is given by 98.8%. (11.) "Industries correspond to the 4-digit level Australian Standard Industrial Classification (ASIC) index. (12.) Italics added for clarity. (13.) This is perhaps exemplified by the blatantly protectionist rhetoric adopted by policy makers of the time. Consider, for example, the speech delivered at the federal house of representatives by J. McEwen, Australia's chief GATT negotiator and minister for trade and industry during the 1950s and 1960s, on the occasion of the tabling of his report regarding the outcomes of the Kennedy Round, in which he noted that "As far as protection for Australian industry is concerned, great care has been taken in any case to avoid impairing its effectiveness" (Snape, Gropp, and Luttrell 1998, p. 386). Similar enthusiasm was displayed in an analogous report pertaining to the outcomes of the Tokyo Round delivered at the house of representatives by J. D. Anthony, McEwen's counterpart in the late 1970s, where he noted, "Australia has achieved a meaningful and advantageous settlement with the U.S.. the European Economic Community (EEC) and Japan without reducing the current level of tariff protection on a single tariff ite m applicable to any manufacturing industry. This was, I believe--I am sure industry agrees with me--a commendable result" (Snape, Gropp, and Luttrell 1998, p. 399). (14.) Italics added for clarity. (15.) The "binding" of a tariff applied to a given import category represents an agreement to adopt a specified tariff "ceiling." Under GATT rules, a country may not increase a "bound" tariff above the agreed "ceiling" without providing appropriate compensating concessions to all pertinent trade partners. (16.) See also summary results, at the bottom of Table 1, column 9. (17.) See summary results, at the bottom of Table 1, column 6. (18.) See Snape, Gropp, and Luttrell (1998, p. 399) and footnote 13. (19.) To perform these comparisons, I rely on the March 2001 edition of the Draft Consolidation of Australia's GATT/WTO Commitments. It should be noted that this database only provides the most recent revisions of bound rates. Hence, where bound rates corresponding to pre-1991 bindings were revised after 1991, say, during the Uruguay Round of 1994, my comparisons would rely on the latest figures. However, it is important to consider that, where present, such amendments invariably represent downward revisions. Hence, using post-1991 bound rates for pre-1991 bindings will have the predictable effect of overestimating the measure of active bindings (this will further facilitate the "stacking of the deck" against my thesis). (20.) There is a considerable body of theoretical literature that investigates the issue of assistance bias in favor of declining industries. Its origins largely derive from the Stigler-Peltzman (SP) regulatory framework (Stigler 1971; Peltzman 1976). A notable application of this framework in the case of trade policy is contributed by Hillman (1982), who modified the original SP formulation by proposing that political support is likely to depend on the divergence of agents' welfare levels from free trade welfare, rather than welfare levels per se. Athough he found that, under such circumstances, there is scope for assistance bias in favor of declining industries, his model predicted that any such assistance will diminish with time until the industry in question is shut down. The model proposed by Hillman (1982) was reinterpreted by Cassing and Hillman (1986) in a (genuinely) dynamic setting, was extended by Long and Vousden (1991) in the context of a general equilibrium framework that incorporated uncertaint y, and was modified by Brainard and Verdier (1997) to account for fixed costs associated with lobby formation and maintenance. The predictions of these contributions were largely consistent with Hillman (1982), entailing a smooth decrease of the price received by the declining industry until its eventual shut down. By contrast, Choi (2001) argued that, by returning to the assumptions of the original SP framework, an alternative "step-shaped" adjustment path is also possible before the eventual collapse. What unifies these studies is a uniform prediction that, although the protection of declining industries may not be provided ad infinitum, there is considerable scope for dispensing such protection for a prolonged period of time. Empirical support for the existence of assistance bias in favor of declining industries is provided by Cheh (1974) who found that, in the case of the United States, tariff cuts during the Kennedy Round were applied less frequently to industries with slower growth rates. (21.) Italics added for clarity. (22.) If we consider that the tariff equation incorporates a total of three variables that are explicitly modeled as endogenous [i.e., tariffs, import penetration, and [DELTA] (import penetration)] then, following Kennedy (1992, p. 165) and Maddala (1977, p. 234), the model will be identified only if the import equation incorporates at least two exogenous variables not included in the tariff equation. (23.) A statistical appendix illustrating detailed sources and construction techniques for all data used in the model can be supplied from the author on request. (24.) The additional instruments are EXP82 (unscaled exports in 1981/1982), EXP91 (unscaled exports in 1990/1991), GP92 (gross product of fiscal year 1991/1992 at factor cost using 1989/1990 prices), EMP90 (employment in 1989/1990), CURASS90 (unscaled value of current assets in 1989/1990), LACOST90 (selected labor costs in 1989/1990), TURN82 (turnover in 1981/1982), and EMPQLD (unsealed employment in state with median population in 1990/1991). (25.) Because regressions of equation systems do not minimize the sum of the squared errors of each independent equation but instead the determinant of the residual cross-product matrix, single-equation R-squared measures are flawed in the context of equation systems. Hence, in the case of 3SLS results, I report the generalized R-squared index, [R.sup.2], suggested by Berndt (1991, p. 468). (26.) In an effort to further investigate the relevance of any indirect, or nonlinear relationship between import penetration and the tariff level beyond what may be inferred from the coefficient of [DELTA](import penetration), the 3SLS formulation of the model was also estimated after replacing [DELTA](import penetration) in the tariff equation with (import penetration) (2) [simultaneous inclusion of both variables in this equation is not possible, because it would have rendered the system of equations unidentified], in a well-known study of the determinants of campaign contributions by Political Action Committees in the United States, Grier, Munger, and Roberts (1994) found import penetration to be positively related to the dependent variable but the coefficient of (import penetration) (2) to be negative and significant. Extrapolation from those findings suggests that a symmetric relationship is likely to characterize the corresponding variables that appear in my model. As projected, (import penetration) (2 ) assumed a negative coefficient in the modified framework. The coefficients of all remaining variables of both equations remained qualitatively unchanged and with negligible quantitative differences, in the interest of parsimony, the relevant results are not reported in this article. However, they can be made available directly from the author on request. (27.) Italics added. (28.) It should he noted that when a regressor is dropped, all associated instruments are also dropped. See the notes pertaining to Table 4 for relevant details. (29.) These are instruments other than those that appear as regressors in the model. See the notes pertaining to Table 4. References Aislabie, Colin. 1988. Economic incentives and the pattern of the Australian tariff. Australian Economic Papers 27:20-32. Anderson, Kym. 1980. The political market for government assistance to Australian manufacturing industries. Economic Record 56:132-44. Anderson, Kym. 1995. 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Christis G. Tombazos * * Department of Economics, Monash University, Victoria 3800, Australia; E-mail Christis.Tombazos@BusEco.monash.edu.au. I owe a great debt to numerous people for thoughtful comments, suggestions or advice at various stages of this research. In particular, I would like to thank Kym Anderson, Ann Capling, John Campbell, Mardi Dungey, William Greene, Southern Economic Journal co-editor Kevin Grier, Hal Hill, Mitch Kaneda, Neville Norman, Jonathon Picus, Ed Ray, Peter Rodriguez, Richard Snape, Daniel Trefler, Peter Warr, the participants of the 75th annual conference of the Western Economic Association, the seminar participants of the Research School of Pacific and Asian Studies (RSPAS) of the Australian National University, the seminar participants of the department of economics of the University of Melbourne, and an anonymous referee. Thanks also go to the Department of Foreign Affairs and Trade of the commonwealth of Australia, and particularly Klea Maniatis and Joan Hird, for providing portions of the data. Financial support from the Faculty of Business and Economics of Monash University is gratefully acknowledged. The usual c aveat applies. |
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