Essays on International Trade

The dissertation consists of three chapters on international trade focusing on various aspects of trade policies. The objective in the first chapter is to evaluate the degree to which the pattern of applied tariffs across WTO members deviates from a balanced-concession condition. To this end, a quantitative trade model is employed, and alternative definitions of reciprocity (based on market access or welfare) are used to measure the concessions received and given by each country during 1995--2011 for a large set of 64 economies and 20 sectors, relative to the counterfactual of unilateral optimal tariffs. The second chapter provides the first empirical analysis on how product likeness, approximated by elasticity of substitution, affects trade frictions associated with non-tariff barriers that are subject to national treatment. Regression results using both product- and firm-level trade data are consistent with the hypothesis that technical barriers to trade create more frictions when the corresponding market and product have a smaller elasticity of substitution. The third chapter highlights the role of trade imbalances in optimal tariff analysis. It is demonstrated that treating trade imbalances as gifts or purging trade imbalances leads to unintended implications on optimal tariff policy analysis or under-estimated welfare gains of tariff cooperation. We show that the reputable negotiating rule of the GATT/WTO --- the principle of reciprocity --- cannot neutralize the terms-of-trade externality in the presence of trade imbalances. We propose methodologies toward endogenizing trade imbalances in general equilibrium trade models by calibrating time-varying country-specific discount factors, such that the model matches the pattern of borrowing and lending across countries.