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Technical Barriers, Import Licenses and Tariffs as Means of Limiting Market Access

Author

Listed:
  • JØrgensen, Jan G.

    (University of Southern Denmark)

  • Schröder, Philipp J.H.

    (Aarhus School of Business)

Abstract

Technical barriers (standards), import licenses and tariffs may be deployed as means of limiting the market access of foreign firms. The present paper examines these measures in a setting of monopolistic competition. We find that, if protection focuses predominantly on the number of foreign firms accessing the domestic market, a technical barrier (an import license) may dominate a tariff (tariff and a technical barrier) in terms of consumer welfare, even when tariff revenues are fully redistributed. However, if protection pays sucfficient focus on limiting the total import volume, then tariffs are the preferred means of protection. Within the model, reductions in technical barriers and tariffs, the removal of licensing schemes, and a harmonization of standards are all welfare-improving policies.

Suggested Citation

  • JØrgensen, Jan G. & Schröder, Philipp J.H., 2006. "Technical Barriers, Import Licenses and Tariffs as Means of Limiting Market Access," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 120-146.
    • Handle: RePEc:ris:integr:0348
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    Keywords

    non-tariff barriers; technical trade barriers; standards; import licenses; monopolistic competition;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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