TY - JOUR

T1 - Politicized trade

T2 - What drives withdrawal of trade preferences?

AU - Gassebner, Martin

AU - Gnutzmann-Mkrtchyan, Arevik

N1 - Funding Information: Data on countries’ GSP status, worker rights petitions, and investigations originate from the USTR (see Carnegie, 2015 who kindly shared this data). The dataset starts in 1985 when worker rights violations were added to the list of GSP eligibility criteria. In total 129 petitions about worker rights violations have been filed between 1985 and 2012. There are 243 country-year instances where benefits were suspended as a result of a review. 4 4 Some suspensions were non-labor-driven. Our results are unaffected by their exclusion. UNGA voting alignment data come from Voeten et al. (2017) . 5 5 We consider only country-years with at least 2 votes. Total exports and exports under GSP are obtained from the U.S. International Trade Commission. Democracy is taken from the Polity IV Project, 6 6 http://www.systemicpeace.org/inscrdata.html . freedom from slave labor from Coppedge et al. (2015) , and GDP and GDP per capita from Penn World Tables, version 7. We obtain the labor standards index from  Mosley and Uno (2007) and the U.S. FDI stock in the recipient country from the OECD. 7 7 http://stats.oecd.org/Index.aspx?DatasetCode=FDI_FLOW_INDUSTRY . Summary statistics are reported in Table A.1 . 5

PY - 2017/12/8

Y1 - 2017/12/8

N2 - While it is well understood that industrialized countries use aid to grant political favors, little research covers alternative channels such as trade policy towards developing countries. We analyze eligibility investigations and revoking of U.S. Generalized System of Preferences (GSP) benefits to see whether political friends of the U.S. receive favorable treatment. While countries politically aligned with the U.S. are equally likely to be investigated, they are significantly less likely to have their benefits suspended.

AB - While it is well understood that industrialized countries use aid to grant political favors, little research covers alternative channels such as trade policy towards developing countries. We analyze eligibility investigations and revoking of U.S. Generalized System of Preferences (GSP) benefits to see whether political friends of the U.S. receive favorable treatment. While countries politically aligned with the U.S. are equally likely to be investigated, they are significantly less likely to have their benefits suspended.

KW - Development

KW - Generalized system of preferences

KW - Trade policy

KW - United nations general assembly

UR - http://www.scopus.com/inward/record.url?scp=85043475267&partnerID=8YFLogxK

U2 - https://doi.org/10.3929/ethz-b-000213817

DO - https://doi.org/10.3929/ethz-b-000213817

M3 - Article

AN - SCOPUS:85043475267

VL - 167

SP - 10

EP - 13

JO - Economics letters

JF - Economics letters

SN - 0165-1765

ER -