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Trade Policy Reform: How to Win Wide-ranging Support?

Published online by Cambridge University Press:  09 January 2015

Fabian Bergès  and
Sylvette Monier-Dilhan
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Summary

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.

Cet article analyse l'effet d'une politique de commerce international sur un marché domestique en concurrence imparfaite, en prenant en compte les consommateurs et les firmes amont/aval. Nous étudions l'impact d'une baisse des droits de douane et montrons que le profit des firmes en amont diminue et parfois les recettes fiscales. Nous modélisons ensuite un accroissement des barrières non-tarifaires, qui se traduit par une faible substituabilité entre les biens domestiques et importés. La situation de chaque agent s'améliore grâce à une moindre concurrence internationale. Enfin, nous montrons que sous certaines conditions une politique de diminution des droits de douanes et d'augmentation des barrières non-tarifaires est profitable à tous les agents. Ce résultat peut expliquer la prolifération des normes nationales comme contrepartie de droits de douanes plus faibles négociés par les gouvernements.

Keywords

Trade PolicyNon-Tariff BarriersVertical structureF12F13L14Commerce international, barrières non-tarifairesstructure verticaleF12F13L14
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 79 , Issue 2 , June 2013 , pp. 27 - 43
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2013 

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Footnotes

*

Toulouse School of Economics (Gremaq-lnra) & IDEI, MF 217, 21 Allée de Brienne, F-31000 Toulouse, France, Mail: Fabian.Berges@toulouse.inra.fr, Phone: +33.5.61.12.85.80, Fax: +33.5.61.22.55.63

**

Observatoire du Développement Rural (ODR), Institut National de la Recherche Agronomique Chemin de BORDE ROUGE, BP 52627, F-31326 CASTANET TOLOSAN – Cédex (France), Mail: Sylvette.Monier@toulouse.inra.fr

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