Bergès, Fabian and Monier-Dilhan, Sylvette (2010) Trade Policy Reform: How to win wide-ranging support? TSE Working Paper, n. 10-205

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This article analyzes the effects of international trade policies on an imperfect competitive domestic market, taking into account not only consumers but also upstream and downstream firms. We first study the impact of a classic import tax decrease and we find that upstream firms are harmed and domestic fiscal revenues may decrease with such a policy. We then look at the effect of an increase in non-tariff barriers, seen as the lowest degree of substitutability between the domestic good and the imported good. The result is an improvement in each agent’s situation, since international competition becomes less fierce. Last, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes every agent better off. This can explain why we observe a proliferation of domestic standards at national level in order to back up lower tariff negotiations by governments.

Item Type: Monograph (Working Paper)
Language: English
Date: December 2010
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
L20 - General
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 06:03
Last Modified: 02 Apr 2021 15:36
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