This paper presents an analysis of the effect of China's entry into the WTO on the quality choices of Chinese exporters in terms of their outputs and their inputs. Using highly disaggregated firm-level data, we show that the quality upgrading made possible by China's tariff reductions was concentrated in the least productive Chinese exporters. These firms, which had been laggards in terms of quality prior to the tariff reduction, were the most aggressive in increasing the quality of their exports and their inputs and in redirecting their exports toward high income markets where demand for high quality goods is strong. Our empirical results are consistent with a simple model featuring scale effect and non-Hicks' neutral productivity that disproportionately affects the efficiency with which firms use intermediate inputs. This latter feature does not appear in workhorse models of firm heterogeneity and endogenous quality choice which provide a distorted view of the impact of trade liberalization on quality upgrading.
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In this paper you will learn what the WTO does, how it does this, how it is set up, criticisms against the WTO and arguments for the WTO.
The World Trade Organization is the only global international organization dealing with the rules of trade between nations.
“I will use my position as chairman of the Senate Finance Committee, which has jurisdiction over international trade policy in the US Senate, to carefully scrutinise the positions taken by WTO members during this ministerial. The United States evaluates potential partners for free trade agreements on an ongoing basis.I will take note of those nations that played a constructive role in Cancun, and those nations that did not. ”
Whether this comes to something more than saber-rattling is unsure at this point, but it clearly indicates American political dissatisfaction with the results of Cancun. The long-term results may result in regional trading blocs, which could leave many third world countries (notably those in Africa) out in the cold.