Local Content Requirements: A Global Problem

Policy Analyses in International Economics 102
by Gary Clyde Hufbauer and Jeffrey J. Schott and Cathleen Cimino-Isaacs and Martin Vieiro and Erika Wada
September 2013
Book Description

In the wake of the Great Recession of 2008–09, economists feared that protectionist policies might sweep the world economy, echoing the wave of tariff escalations during the Great Depression of the 1930s. To some surprise, officials were more restrained and largely avoided traditional forms of protection (tariffs and quotas). As a result, economists underestimated the incidence of new protectionism because policymakers increasingly turned to more opaque behind-the-border nontariff barriers (NTBs). Using a combination of statistical analysis and case studies, the authors show that local content requirements (LCRs), a form of NTB, have become increasingly popular. How much was global trade actually reduced on account of LCRs? A conservative estimate might be $93 billion. Case studies featured cover the healthcare sector in Brazil, wind turbines in Canada, the automobile industry in China, solar cells and modules in India, oil and gas in Nigeria, and "Buy American" restrictions on government procurement.

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Executive Summary [pdf]

1. Introduction: The LCR Phenomenon [pdf]

2. Alternatives to Local Content Requirements

3. Survey and Case Studies [pdf]

4. Healthcare Industry in Brazil

5. Wind Turbines in Canada

6. Automobile Industry in China

7. Solar Cells and Modules in India

8. Oil and Gas Industry in Nigeria

9. Not Buying It: Buy American/Buy America

10. Conclusions and Recommendations

Appendix A Local Content Requirements since 2008


Index [pdf]

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Book Data

September 2013
ISBN paper 978-0-88132-680-2
212 pp.

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