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Tariff Reform: Some Pre-strategic Considerations

  • Kemp, Murray

    (U of New South Wales)

  • Wan, Henry, Jr.

    (Cornell U)

We consider the implications of improving on GATT/WTO tariff negotiations both the most-favoured-nation (MFN) clause and the twin Paretian rules (that negotiations leave the trading world on its efficiency locus and each participating country in a preferred position). It is shown that the set of tariff reforms that satisfy both rules (a) is always non-empty, (b) might include no reforms that end in world-wide free trade, (c) always includes reforms that are incompatible with free trade and (d) might include reforms that support a Pareto-optimal and Pareto-improving allocation but also support other allocations with neither of those characteristics.

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Paper provided by Cornell University, Center for Analytic Economics in its series Working Papers with number 03-01.

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Date of creation: Jan 2003
Date of revision:
Handle: RePEc:ecl:corcae:03-01
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  1. Grandmont, J. M. & McFadden, D., 1972. "A technical note on classical gains from trade," Journal of International Economics, Elsevier, vol. 2(2), pages 109-125, May.
  2. Grinols, Earl L., 1981. "An extension of the Kemp-Wan theorem on the formation of customs unions," Journal of International Economics, Elsevier, vol. 11(2), pages 259-266, May.
  3. Kemp, Murray & Wan, Henry, Jr., 2003. "Lumpsum versus Non-lumpsum Redistribution: A Second Glance," Working Papers 03-02, Cornell University, Center for Analytic Economics.
  4. Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
  5. Kemp, Murray C & Wan, Henry Y, Jr, 1972. "The Gains from Free Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 509-22, October.
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