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Raw Materials, Processing Activities, and Protectionism

Author

Listed:
  • Ronald W. Jones
  • Barbara J. Spencer

Abstract

A country's export sector may encompass a raw material, as well as a final commodity that processes that raw material. A general equilibrium model is developed in a competitive setting to analyze a nation's optimal strategy in restricting raw materials exports when allowance is made for potential beneficial effects on the export price of processed goods. When faced with a foreign tariff on exports of the processed commodity, a country's optimal response could entail an easing of raw materials export constraints instead of retaliation. Illustrations are provided of the 1986 American tariff on Canadian exports of cedar shakes and shingles.

Suggested Citation

  • Ronald W. Jones & Barbara J. Spencer, 1989. "Raw Materials, Processing Activities, and Protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 469-486, August.
  • Handle: RePEc:cje:issued:v:22:y:1989:i:3:p:469-86
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    References listed on IDEAS

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    1. Paul A. Samuelson, 2011. "The Collected Scientific Papers of Paul Samuelson," MIT Press Books, The MIT Press, edition 1, volume 7, number 0262015749 edited by Janice Murray.
    2. repec:cup:apsrev:v:60:y:1966:i:01:p:29-38_12 is not listed on IDEAS
    3. R. M. Cyert & M. H. DeGroot, 1970. "Multiperiod Decision Models with Alternating Choice as a Solution to the Duopoly Problem," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 410-429.
    4. J. W. Friedman, 1968. "Reaction Functions and the Theory of Duopoly," Review of Economic Studies, Oxford University Press, vol. 35(3), pages 257-272.
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    Cited by:

    1. Rod Falvey & Geoff Reed, 2002. "Rules of Origin as Commercial Policy Instruments," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 393-408, May.
    2. Kazuhiro Testu, 2006. "Tourism Promotion and Regional Development in Low-income Developing Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 417-424.
    3. Lionel Fontagné, 1995. "Why NAFTA Might Be Discriminatory," Working Papers 1995-12, CEPII research center.
    4. Gilbert, John, 2000. "Raw Materials, Processing Incentives And Foreign Ownership," 2000 Annual meeting, July 30-August 2, Tampa, FL 21866, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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