Natural resources and non-cooperative trade policy
When looking at the conditions of trade in natural resources the world appears upside down: tariff protection in natural resources sectors is generally lower than for overall merchandise trade, while export restrictions are twice as likely as in other sectors. On the other hand, tariff escalation is significant in natural resources sectors, where materials in their raw state face, on average, lower duties than in their processed form. In this paper, we discuss how export taxes and tariff escalation may be the result of an uncooperative trade policy. Specifically, tariff escalation and export taxes can be beggar-thy-neighbor policies because governments may be tempted to use them to alter the relative price of exports to their advantage (terms-of-trade effect) or to expand the domestic processing industry at the expenses of foreign production (production relocation effect). In equilibrium, these policies offset each other in a Prisoners' Dilemma situation, where trade is inefficiently low.
(This abstract was borrowed from another version of this item.)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bagwell,K. & Staiger,R.W., 1998.
"An economic theory of GATT,"
15, Wisconsin Madison - Social Systems.
- Ottaviano, Gianmarco & Melitz, Marc, 2008.
"Market Size, Trade, and Productivity,"
3229096, Harvard University Department of Economics.
- Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," NBER Working Papers 11393, National Bureau of Economic Research, Inc.
- Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d'Agliano, University of Milano.
- Anderson, James E., 1998. "Effective protection redux1," Journal of International Economics, Elsevier, vol. 44(1), pages 21-44, February.
- Bela Balassa, 1965. "Tariff Protection in Industrial Countries: An Evaluation," Journal of Political Economy, University of Chicago Press, vol. 73, pages 573.
- Hudson, Darren & Ethridge, Don E., 1998.
"The Implications of an Export Tax on Sectoral Growth: A Case in Pakistan,"
Cotton Economics Research Institute CER Series
53164, Texas Tech University, Department of Agricultural and Applied Economics.
- Hudson, Darren & Ethridge, Don E., 1998. "The Implications Of An Export Tax On Sectoral Growth: A Case In Pakistan," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20986, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Bhagwati, Jagdish N. & Srinivasan, T. N., 1973.
"The general equilibrium theory of effective protection and resource allocation,"
Journal of International Economics,
Elsevier, vol. 3(3), pages 259-281, August.
- J. Bhagwati & T. N. Srinivasan, 1972. "The General Equilibrium Theory of Effective Protection and Resource Allocation," Working papers 91, Massachusetts Institute of Technology (MIT), Department of Economics.
- Lindland, Jostein, 1997. "The impact of the Uruguay Round on tariff escalation in agricultural products," Food Policy, Elsevier, vol. 22(6), pages 487-500, December.
- Antimiani, Alessandro & Salvatici, Luca, 2005.
"EU Trade Policies: Benchmarking Protection in a General Equilibrium Framework,"
18856, TRADEAG - Agricultural Trade Agreements.
- Antimiani, Alessandro & Salvatici, Luca, 2007. "EU Trade Policies: Benchmarking Protection in a General Equilibrium Framework," Economics & Statistics Discussion Papers esdp07034, University of Molise, Dept. EGSeI.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
When requesting a correction, please mention this item's handle: RePEc:kap:iecepo:v:8:y:2011:i:2:p:177-196. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.