Bergès, Fabian and Monier-Dilhan, Sylvette (2013) Trade Policy Reform: How to win wide-ranging support? Louvain Economic Review - Recherches Economiques de Louvain, 79 (2).

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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.

Item Type: Article
Language: English
Date: 2013
Refereed: Yes
Uncontrolled Keywords: trade policy, non-tariff barriers, barrières non-tarifaires, vertical structure, structure verticale
JEL Classification: F12 - Models of Trade with Imperfect Competition and Scale Economies
F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
L14 - Transactional Relationships; Contracts and Reputation; Networks
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:27
Last Modified: 02 Apr 2021 15:47
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