> Also, could someone give a quick theory of effective protection,
If intermediate inputs are assessed a lower tariff than
final goods, the value-added by domestic firms which turn
those inputs into final goods is protected to a greater
degree than the amount of the tariff on the final good.
A fuller treatment is at:
http://prome.snu.ac.kr/~wthong/trade/ch10-5.html
> which if I
> understand right says that the US degree of protection is much higher than
> 3 percent in terms of its effects?
This would require both a tariff structure that discriminates
against final goods, and a lot of U.S. goods in which
lightly-tariffed foreign inputs are a lot of the final value.
My impression is that US rates of effective protection are
not especially high; maybe there are lurking trade theorists
who know for sure.
In assessing the harm done by NAFTA and so forth I'd turn to
Polanyi rather than to trade theory. The key issues IMHO have
to do with institutionalizing inadequate environmental
protections and especially inadequate workers' rights (plus
low wage shares), not which industry gets a little more or
less protected.
Best, Colin
