Bilateral Trade as a Development Instrument Under Global Trade Restrictions

In their striving toward development, a number of less developed countries have espoused bilateral trade as yet another policy instrument allowing them to increase their acquisition of foreign resources. This has been particularly true of the trade of India, Pakistan, and Egypt, on which some useful empirical studies have been conducted. The target we are interested in is not trade efficiency as an end in itself, but growth. For a number of countries, the ability to grow depends very much on the ability to import. Hence, it is in terms of this target that we propose to evaluate the efficiency of bilateral trade as a policy instrument and to examine a number of related issues, such as the terms of trade, trade diversion, and its effect on resource allocation. A brief description of bilateral trade agreements starts our discussion followed by a three-country model as a theoretical formulation of the problem. Finally, several implications will be derived in relation to the issues mentioned above.

Protection and Competitiveness in Egyptian Agriculture and Industry

This paper contains the basic statistical material upon which Effective Rates of Protection (ERPs), Domestic Resource Costs (DRCs), and crop acreage responses were calculated by the authors for their volume on Egypt in the NBER project Foreign Trade Regimes and Economic Development. This material, which includes some comparisons of Egyptian costs of production with those of other countries for a number of commodities, is too extensive for that volume, in which interest is focused on the end results of the calculations. The underlying data, however, are not easily accessible: some of them took us along time to gather, and readers might want to work on the data themselves for further research in this field. We also felt that readers should be in a position to evaluate our calculations.