Trade policy and firm behaviour

(eng) There is an on-going debate around whether flexibilities incorporated in multilateral trade rules, particularly contingent protection measures, are desirable. Proponents of these instruments argue that they are necessary to achieve further process of liberalisation by providing governments with safety valves in the case of unforeseen circumstances. On the other hand, critics note that the institutional arrangements of these policies make them particularly vulnerable to manipulation by private interests, with the risk of severe adverse effects on international markets. Using a variety of specially constructed datasets, this thesis contributes to the debate by analysing how firms react to these institutional specificities. It provides compelling evidence suggesting the presence of potential welfare losses for countries imposing these measures due to anticompetitive effects and losses in their terms-of-trade. It also contributes to the understanding of why, in spite of these welfare losses, contingent protection is still so intensively used by identifying the characteristics of firms pursuing this type of protection.