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Does Import Protection Discourage Exports?


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  • Stephen Tokarick
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    This paper points out that while many developing countries seek to increase their export earnings, they have not embraced fully the notion that their own pattern of import protection hurts their export performance. The paper quantifies the extent to which import protection acts as a tax on a country''s export sector and finds that for many developing countries, the magnitude of the implicit tax is substantial-about 12 percent, on average, for the countries studied. The paper also illustrates the effects of various tariff-cutting scenarios in the Doha Round on export incentives and concludes that, in general, developing countries could increase their export earnings by reducing their own import tariffs, but countries must be careful about how these tariff reductions are achieved. For example, tariff-cutting schemes that exempt certain sectors could actually be harmful.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/20.

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    Length: 27
    Date of creation: 01 Jan 2006
    Date of revision:
    Handle: RePEc:imf:imfwpa:06/20

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    Keywords: Welfare; Developing countries; Export earnings; Export taxes; Import restrictions; Import tariffs; Protectionism; tariff barriers; tariff reductions; export tax; export sector; export incentives; import protection; imported intermediate; export sectors; exporters; intermediate inputs; developing country exports; price of exports; export disincentives; tariff rates; anti-export bias; tariff rate; export bias; tariff cuts; export performance; agricultural exports; import tariff; world prices; nontariff barriers; tariff structure; equilibrium model; trade flows; world trade; producer prices; export volume; value of exports; price of imports; rates of protection; imported goods; country tariff; global trade; export growth; terms of trade; world price; domestic price; export values; tariff protection; non-tariff barriers; export promotion; export volumes; elasticity of substitution; export barriers; applied tariff; world markets; domestic prices; trade liberalization; global trade analysis; trade barriers; manufactured export; tariff reduction; import barriers; imported intermediates; transport costs; tariff distortions; world trade organization; high tariffs; tariff revenue; quantitative restrictions; constant elasticity of substitution; domestic price of imports; economic integration; indirect tax; world economy; domestic demand; reducing tariffs; exported good; aggregate demand; products exports; imported good; informal export barriers; average import tariff; tariff cut; intermediate goods; tariff equivalents; eliminating tariffs; zero profits; political economy; preferential tariff; tariff equivalent; export goods; perfect substitutes; trade policies; trade patterns; exporter; export industry; import-competing sectors; export promotion strategy; export-oriented industry; goods for export; import-competing producers; imported inputs; export growth rates; duty drawbacks; prices of exports; exported goods; domestic market;

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    1. Porto, Guido G., 2005. "Informal export barriers and poverty," Journal of International Economics, Elsevier, Elsevier, vol. 66(2), pages 447-470, July.
    2. Ianchovichina, Elena, 2002. "Trade policy analysis in the presence of duty drawbacks," Policy Research Working Paper Series 3312, The World Bank.
    3. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics, Elsevier, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
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    Cited by:
    1. David A. Grigorian & Edward R. Gemayel, 2005. "How Tight is too Tight? a Look At Welfare Implications of Distortionary Policies in Uzbekistan," IMF Working Papers 05/239, International Monetary Fund.


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