revised version forthcoming in IMF Staff Papers

US Trade Policy and the Adjustment Process

Chad P. Bown and Rachel McCulloch
Brandeis University

August 2004

Abstract

       Michael Mussa (1974, 1978, 1982) was among the first theorists to analyze the economics of adjustment to changing conditions of international trade, and throughout his career he has also been an outspoken commentator on the political economy of trade policy. This paper focuses on the “adjustment environment” in the United States as set out by the active US trade remedy laws (antidumping, countervailing duties, and safeguards) and the Trade Adjustment Assistance program. We document US industries’ use of these various laws and relate industry use of trade policies to import competition and revealed comparative advantage. We also examine potential effects of US trade policies on adjustment to shifting comparative advantage and give examples of industry outcomes.