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Non-Tariff Barriers and Trade Liberalization

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  • Simon P. Anderson
  • Nicolas Schmitt

Abstract

This paper shows that governments have no incentive to introduce non-tariff barriers when they are free to set tariffs but they do when tariffs are determined cooperatively. We then show three results. First, with trade liberalization, there is a progression from u sing tariffs only to quotas, and to antidumping constraints (when quotas are jointly eliminated). Second, there is a narrowing of the range of industries in which each instrument is used. Third, the degree of tariff liberalization and of replacement of ta riffs by NTBs depend on industry characteristics. These results are roughly in line with the empirical evidence.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2000/wp-cesifo-2000-02/WP254.PDF
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 254.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_254

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Keywords: Tariffs; trade policy; reciprocal dumping; quotas; antidumping;

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References

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  1. Cassing, James H. & Hillman, Arye L., 1985. "Political influence motives and the choice between tariffs and quotas," Journal of International Economics, Elsevier, Elsevier, vol. 19(3-4), pages 279-290, November.
  2. Bagwell, Kyle & Staiger, Robert W, 1990. "A Theory of Managed Trade," American Economic Review, American Economic Association, American Economic Association, vol. 80(4), pages 779-95, September.
  3. bagwell, K. & Staiger, R.W., 1995. "Protection and Business cycle," Working papers, Wisconsin Madison - Social Systems 9511, Wisconsin Madison - Social Systems.
  4. Anderson, James E., 1993. "Domino dumping II: Anti-dumping," Journal of International Economics, Elsevier, Elsevier, vol. 35(1-2), pages 133-150, August.
  5. Anderson, S. P. & Schmitt, N. & Thisse, J.-F., . "Who benefits from antidumping legislation?," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1146, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Moore, Michael O, 1992. "Rules or Politics? An Empirical Analysis of ITC Anti-dumping Decisions," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 30(3), pages 449-66, July.
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  8. Deardorff, Alan V., 1987. "Why do governments prefer nontariff barriers?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 26(1), pages 191-216, January.
  9. Kyle Bagwell & Robert W. Staiger, 1995. "Protection and the Business Cycle," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1130, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. James Brander & Paul Krugman, 1982. "A 'Reciprocal Dumping' Model of International Trade," Working Papers, Queen's University, Department of Economics 513, Queen's University, Department of Economics.
  11. McCulloch, Rachel, 1987. "Why do governments prefer nontariff barriers? A comment on deardorff," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 26(1), pages 217-221, January.
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  18. Ray, Edward John, 1981. "The Determinants of Tariff and Nontariff Trade Restrictions in the United States," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 89(1), pages 105-21, February.
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  21. Marvel, Howard P & Ray, Edward J, 1983. "The Kennedy Round: Evidence on the Regulation of International Trade in the United States," American Economic Review, American Economic Association, American Economic Association, vol. 73(1), pages 190-97, March.
  22. Brian R. Copeland, 1990. "Strategic Interaction among Nations: Negotiable and Non-negotiable Trade Barriers," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 23(1), pages 84-108, February.
  23. Falvey, Rodney E & Lloyd, P J, 1991. "Uncertainty and the Choice of Protective Instrument," Oxford Economic Papers, Oxford University Press, vol. 43(3), pages 463-78, July.
  24. James Nieberding, 1999. "The Effect of U.S. Antidumping Law on Firms' Market Power: An Empirical Test," Review of Industrial Organization, Springer, Springer, vol. 14(1), pages 65-84, February.
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Citations

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Cited by:
  1. Michael Moore & Maurizio Zanardi, 2011. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," ULB Institutional Repository 2013/136352, ULB -- Universite Libre de Bruxelles.
  2. Christian Volpe Martincus & Antoni Estevadeordal, 2009. "Trade Policy and Specialization," IDB Publications 9289, Inter-American Development Bank.
  3. Pascal Ghazalian & Ryan Cardwell, 2010. "Did the Uruguay Round Agreement on Agriculture Affect Trade Flows? An Empirical Investigation for Meat Commodities," International Advances in Economic Research, Springer, Springer, vol. 16(4), pages 331-344, November.
  4. Robert M. Feinberg & Kara M. Olson, 2005. "Tariff Liberalization and Increased Administrative Protection: Is There a Quid Pro Quo?," International Trade, EconWPA 0501001, EconWPA.
  5. Julia Gray & Jonathan Slapin, 2012. "How effective are preferential trade agreements? Ask the experts," The Review of International Organizations, Springer, Springer, vol. 7(3), pages 309-333, September.
  6. Tobias D. Ketterer, 2014. "EU Antidumping and Tariff Cuts: Trade Policy Substitution?," Discussion Papers 2014-05, University of Nottingham, GEP.
  7. Melitz, Marc J., 2005. "When and how should infant industries be protected?," Journal of International Economics, Elsevier, Elsevier, vol. 66(1), pages 177-196, May.
  8. Vives, Xavier, 2005. "Games with strategic complementarities: New applications to industrial organization," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 23(7-8), pages 625-637, September.

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