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Trade policy reform: How to win wide-ranging support?
[Les réformes des politiques de commerce international : comment faire émerger un large consensus?]

Author

Listed:
  • Fabian Berges

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, IDEI - Institut d'Economie Industrielle - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse)

  • Sylvette Monier Dilhan

    (US ODR - Observatoire des Programmes Communautaires de Développement Rural - INRA - Institut National de la Recherche Agronomique)

Abstract

This article analyzes the effects of international trade policies on an imperfectly competitive domestic market, taking account of consumers, as well as upstream and downstream firms. We first study the impact of a classic import tax decrease and find that this policy harms upstream firms and may decrease domestic fiscal revenues. We then examine the effect of an increase in non-tariff barriers, which reduce the degree of substitutability between domestic and imported goods. This results in an improvement in each agent's situation, as international competition becomes less fierce. Finally, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes all agents better off. This can explain the proliferation of domestic standards at national level in order to counterbalance the effect of lower tariffs negotiated by governments.

Suggested Citation

  • Fabian Berges & Sylvette Monier Dilhan, 2013. "Trade policy reform: How to win wide-ranging support? [Les réformes des politiques de commerce international : comment faire émerger un large consensus?]," Post-Print hal-02642353, HAL.
    • Handle: RePEc:hal:journl:hal-02642353
    DOI: 10.3917/rel.792.0027
    as

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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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