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TIMING TRADE DISPUTES TO WIN VOTES: Evidence that US Presidents focus on key industries in swing states

  • Published Date: 22 March 2016

 American presidents strategically delay their reaction to violations of international trade rules so as to maximise their chances of remaining in office. That is the central finding of research by Paola Conconi, David DeRemer, Georg Kirchsteiger, Lorenzo Trimarchi and Maurizio Zanardi, to be presented at the Royal Economic Society's annual conference in Brighton in March 2016.

Looking back through all US trade disputes since 1995 – when the World Trade Organization (WTO) was established – their study finds that disputes spike during re-election years. The chances of these disputes being tilted towards the interests of a swing state (seeking to protect a local industry) also increase by up to 25%.

For example, the Obama administration knew that China had been paying allegedly illegal subsidies to its car industry since 2009, but only filed a WTO dispute in 2012. And given that litigation costs of trade disputes can run into several million dollars, US presidents may choose to only complain about violations that hurt key industries in swing states, while violations that involve other industries may go unpunished.

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