This paper develops new estimates of the welfare and domestic production effects of repealing the US Offshore Assembly Provision (OAP). Although the controversy surrounding the OAP has recently intensified, the only such estimates of repealing the OAP weredeveloped by Finger (1976). The estimates are developed by applying a partial equilibrium trade model of a two-stage production process to nineteen productct categories in which OAP trade was important in 1986. The paper find that repael of the OAP reduces domestic welfare. However, the effects are small and almost negligible in percentage terms. The important effects of repeal are distributional.
ASJC Scopus subject areas
- Economics and Econometrics