Why do countries restrict used good imports? An inquiry into the international political economy of used automobiles

Why in the rush to free trade of the 1980s and 1990s did used automobiles get left behind? Trade theorists are in almost unanimous agreement that the free trade in used machines is desirable and would primarily benefit developing countries. Yet today, a wide variety of mostly developing countries have some sort of additional trade restriction on the import of a used automobile. Despite a sizable literature on the theoretical benefits of this trade, there has been little empirical analysis of it or any explicit consideration of used automobile protection's political economy. This dissertation is arranged around three specific research questions: (1) How does the regulation of used automobile imports vary across countries? (2) What is the impact of used automobile protection on trade (is its impact nontrivial)? And most importantly, (3) What factors explain the variation and persistence of these policies today?; A first-of-its-kind database of used automobile protection was compiled in answer to the first question. In answer to the second question, a categorical used automobile protection score was developed from the data and included as an independent variable in a gravity model of US used automobile exports to 119 countries. The third question is addressed first by using the score as the dependent variable in ordered regression model of the factors influencing its variation across 104 developing and transitional economies. A second approach is offered in a case study of the evolution of Mexico's policy toward used automobile imports. The thesis concludes that used automobile protection is the result of inherent disadvantages faced by used automobile interests in intra-industry trade policy competition (in the sense of Nelson, 1988).