Of fish and whales: the credibility of threats in international trade disputes

In protection of fisheries resources, whales, and other marine mammals, the US has used the threat of trade sanctions to force changes in environmenta l policies of other nations. Nations threatened with trade action must asse ss the credibility of a threat to impose substantial costs on the economy. The credibility of a threat will depend on the ability to divert sanctioned exports to other markets, the price impact of such diversion, and the time required for the diversion to take place. Using as an example the 1993 US threat to impose trade restrictions on imports of fish from Norway as a res ult of Norway's decision to re-commence commercial whaling, this paper prov ides an example of a formal assessment procedure to empirically examine the credibility of threatened trade action. (C) 2001 Society for Policy Modeli ng. Published by Elsevier Science Inc.