DP404 Import Surveillance as a Strategic Trade Policy

Author(s): L. Alan Winters
Publication Date: March 1990
Keyword(s): EC, Import Surveillance, Imports, Strategic Trade Policy, Voluntary Export Restraints
JEL(s): 421, 422
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=404

The EC policy of import surveillance entails the public announcement that henceforth the Commission will collect detailed statistics on particular import flows. The imposition of surveillance, it is argued, will change exporters' perceptions about the probabilities of future import controls. When it anticipates future restrictions, a competitive export industry is likely to increase sales as each firm tries to gain a higher share of any future quota, but an oligopolistic industry may well curtail exports in the hope of avoiding further, more restrictive policy. This paper tests these hypotheses on EC import data and finds them largely supported. It argues that this result constitutes evidence of strategic behaviour.