Hostname: page-component-586b7cd67f-gb8f7 Total loading time: 0 Render date: 2024-11-22T13:00:13.329Z Has data issue: false hasContentIssue false

Trade Policy Reform: How to Win Wide-ranging Support?

Published online by Cambridge University Press:  09 January 2015

Get access

Summary

This article analyzes the effects of international trade policies on an imperfectly competitive domestic market, taking account of consumers, as well as upstream and downstream firms. We first study the impact of a classic import tax decrease and find that this policy harms upstream firms and may decrease domestic fiscal revenues. We then examine the effect of an increase in non-tariff barriers, which reduce the degree of substitutability between domestic and imported goods. This results in an improvement in each agent's situation, as international competition becomes less fierce. Finally, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes all agents better off. This can explain the proliferation of domestic standards at national level in order to counterbalance the effect of lower tariffs negotiated by governments.

Cet article analyse l'effet d'une politique de commerce international sur un marché domestique en concurrence imparfaite, en prenant en compte les consommateurs et les firmes amont/aval. Nous étudions l'impact d'une baisse des droits de douane et montrons que le profit des firmes en amont diminue et parfois les recettes fiscales. Nous modélisons ensuite un accroissement des barrières non-tarifaires, qui se traduit par une faible substituabilité entre les biens domestiques et importés. La situation de chaque agent s'améliore grâce à une moindre concurrence internationale. Enfin, nous montrons que sous certaines conditions une politique de diminution des droits de douanes et d'augmentation des barrières non-tarifaires est profitable à tous les agents. Ce résultat peut expliquer la prolifération des normes nationales comme contrepartie de droits de douanes plus faibles négociés par les gouvernements.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Toulouse School of Economics (Gremaq-lnra) & IDEI, MF 217, 21 Allée de Brienne, F-31000 Toulouse, France, Mail: [email protected], Phone: +33.5.61.12.85.80, Fax: +33.5.61.22.55.63

**

Observatoire du Développement Rural (ODR), Institut National de la Recherche Agronomique Chemin de BORDE ROUGE, BP 52627, F-31326 CASTANET TOLOSAN – Cédex (France), Mail: [email protected]

References

Anders, S. and Caswell, J. (2007), “Standards as Barriers versus Standards as Catalysts: Assessing the Impact of HACCP Implementation on U.S. Seafood Imports”, American Journal of Agricultural Economics, Vol. 91(2), p.310321.Google Scholar
Anders, S. and Caswell, J. (2009), “The Benefits and Costs of Proliferation of Geographical Labeling for Developing Countries”, Estey Journal of International Law and Trade Policy, 10, 7793.Google Scholar
Anderson, S. and Schmitt, N. (2003), “Nontariff barriers and trade liberalization”, Economic Inquiry, 41(1), 8097.Google Scholar
Avenel, E. and Barlet, C. (2006), “The link between tariffs and imports in a country with endogenous vertical structure and lenient control of concentrations: a good reason for WTO negotiators to care about antitrust”, Revista FACEF Pesquisa, 9, 103113.Google Scholar
Beghin, J. (2006), “Nontariff Barriers”, Center for Agricultural and Rural Development, Working Paper 06-WP 438, Iowa State University.Google Scholar
Bernhofen, D. (2001), “Product Differentiation, Competition and International Trade”, Canadian Journal of Economics, Vol. 34(4), 10101023.Google Scholar
Bown, C. and Tovar, P. (2011), “Trade Liberalization, antidumping and safeguards: Evidence from India's tariff reform”, Journal of Development Economics, 96, 115125.Google Scholar
Chan, K. (1988), “Trade Negotiations in a Nash Bargaining Model”, Journal of International Economics, Vol. 25, 353363.Google Scholar
Feinberg, R. and Reynolds, K. (2007), “Tariff Liberalization and Increased Administrative Protection: Is There a Quid Pro Quo?”, The World Economy, 948–96.Google Scholar
Finger, J., Ingco, M. and Reincke, U. (1996), “The Uruguay Round: Statistics on Tariffs, Concessions Given and Received”, Washington DC: World Bank, 203 pages.Google Scholar
Hamilton, S. and Requate, T. (2004), “Vertical Structure and Strategic Environmental Trade Policy”, Journal of Environmental Economics and Management, Vol. 47(2), 260269.Google Scholar
Irmen, A. (1997), “Note on duopolistic vertical restraints”, European Economic Review, 41, 15591567.Google Scholar
Josling, T. (2006), “The War on Terroir: Geographical Indications as a Transatlantic Trade Conflict”, Journal of Agricultural Economics, Vol. 57(3), 337363 Google Scholar
Marette, S. and Beghin, J. (2010), “Are Standards Always Protectionist?”, Review of International Economics, 18, 179192.Google Scholar
Moore, M. and Zanardi, M. (2009), “Does Antidumping use contribute to trade liberalization in developing countries?”, Canadian Journal of Economics, 42(2), 469495.Google Scholar
Osborne, M. and Rubinstein, A. (1990), “Bargaining and Markets”, Academic Press, ISBN 0-12-528632-5, 211 pages.Google Scholar
Raff, H. and Schmitt, N. (2009), “Buyer Power in International Markets”, Journal of International Economics, Vol. 79, 222229.Google Scholar
Régibeau, P. and Rocketty, K.E. (2006), “Administrative Delays as Barriers to Trade”, Contributions to Economic Analysis & Policy, 5(1), article 27.Google Scholar
Spencer, B. and Jones, R. (1992), “Trade and protection in vertically related markets”, Journal of International Economics, 32, 3155.Google Scholar
Spencer, B. and Jones, R. (1991), “Vertical foreclosure and international trade policy”, Review of Economic Studies, 58, 153170.Google Scholar
United Nations Conference on Trade and Development (UNCTAD), (2005), “Methodologies, Classifications, Quantification and Development Impacts of Non-Tariff Barriers: Note by the UNCTAD Secretariat,” Document TD/B/ COM.1/EM.27/2, June 23 of 2005.Google Scholar
World Trade Organization (2010), The WTO in Brief, Brochure available on http://www.wto.org, 8 pages, last access: October 21st of 2011.Google Scholar
Yu, Z. (2000), “A Model of Substitution of Non-Tariff Barriers for Tariff”, The Canadian Journal of Economics / Revue Canadienne d'Économique, 33, 10691090.Google Scholar