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Fiscal Implications of Multilateral Tariff Cuts

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Author Info

  • Azim M. Sadikov
  • Hans P. Lankes
  • Dustin Smith
  • Katrin Elborgh-Woytek
  • Jean-Jacques Hallaert

Abstract

The paper contributes to the discussion about the revenue implications of trade reform by assessing the approximate fiscal revenue impact of different liberalization formulae under consideration in multilateral trade negotiations for a group of low- and middle-income countries. The study applies a linear optimization framework to data for bound tariffs, applied tariffs, and imports at the HS-6 digit level for 58 developing countries, and simulates results for different sets of import demand elasticities and developing country "flexibilities." While only a small number of countries face a significant impact, results point toward the need for complementary fiscal measures in the countries most affected by revenue loss.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/203.

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Length: 36
Date of creation: 01 Sep 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/203

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Keywords: Taxation; trade liberalization; tariff revenue; tariff cuts; trade taxes; tariff lines; tariff rates; tariff rate; tariff reductions; import demand; tariff barriers; export subsidies; impact of trade liberalization; impact of trade; world trade; world trade organization; non-tariff barriers; applied tariff; tariff reduction; trade negotiations; loss of tariff revenue; trade reform; tariff cut; agricultural imports; trade liberalization measures; tariff reform; domestic taxes; multilateral trade; mfn tariffs; import prices; international trade; export data; average tariff rate; regional trade agreements; import duties; tariff escalation; indirect tax rates; quantitative restrictions; agricultural export subsidies; trade liberalisation; intellectual property rights; trade regime; trade openness; multilateral trade liberalization; indirect tax; oil imports; trade-weighted average; world economy; trade tax revenue; tariff preferences; trade creation; tariff negotiations; average tariff; reduction in tariffs; imported goods; import tariffs; customs administration; producer prices; trading blocs; intellectual property; exchange rate movements; tariff liberalization; multilateral trade negotiations; high tariffs; quota-free access; agricultural export; tariff revenues; regional trade; effects of trade liberalization; tax incentives; anti-dumping measures; transition period; intermediate goods; average tariffs; interest groups; non-tariff measures; political economy; trade policy reform; trading partners; trade agreements; dispute settlement; import tariff; domestic consumption; trade policies; value of imports; tariff revenue losses; bilateral market access;

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Cited by:
  1. Sokolovska, Olena & Sokolovskyi, Dmytro, 2011. "The effect of tax-tariff reform: evidence from Ukraine," MPRA Paper 42643, University Library of Munich, Germany.
  2. Sam LAIRD, 2007. "Aid for Trade: Cool Aid or Kool-Aid?," G-24 Discussion Papers 48, United Nations Conference on Trade and Development.

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