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How Do US Economic Sanctions Affect EU's Trade with Target Countries?
Author(s) -
Yang Jiawen,
Askari Hossein,
Forrer John,
Zhu Lili
Publication year - 2009
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2009.01190.x
Subject(s) - sanctions , economics , international economics , international trade , economic sanctions , panel data , european union , affect (linguistics) , political science , psychology , communication , law , econometrics
We investigate the impact of US economic sanctions on EU's trade using a panel data approach expressed in a two‐level framework. Both multilateral and unilateral sanctions involving the US and the EU have a negative impact on EU trade (total, imports and exports). We argue that unilateral sanctions, if extensive in nature, would have a depressing impact on target countries’ trade, especially in the stage after sanctions have been imposed. Over time, both multilateral and unilateral sanctions lead to an increase in a target country's exports to the EU, lending support to the third‐country effect of sanctions.