Factors Affecting The Use Of WTO Fiscal Protection Instruments

Abstract

Many countries, especially developed countries, have been trying to liberalize international trade for many years. Although it is intended to liberalize international trade, countries do not hesitate to use protection policy instruments. Within the means of protectionism, fiscally protection instruments are the most popular instruments, consisting of anti-dumping, countervailing duty, and safeguards, following the invisible obstacles. This article examines the macroeconomic factors affecting the use of fiscally protection instruments for country groups and each country through the negative binomial regression analysis between the years 1995-2016. As a result of the analysis, only the real exchange rate affected the use of fiscally protection instruments in high-income countries, while the growth rate, real exchange rate, and unemployment rate affect the low and middle-income countries. This shows that high-income countries do not use fiscal protection instruments fairly, and the low and middle-income countries act with completing their economic development and macroeconomic concerns.