Evaluating the Robustness of Trade Restrictiveness Indices

In a series of papers, Anderson and Neary have developed a trade restrictiveness index (TRI) that is firmly grounded in economic theory and that can be implemented empirically. In order to calculate TRIs in practice, one needs a model. This paper examines the robustness of TRI calculations to alternative model structures and it shows that the TRI is not very sensitive to changes in elasticities of substitution between factors of production, but it can be quite sensitive to alternative model structures (e.g. specific or mobile factor models). Also, the paper points out that in assessing trade restrictiveness over time, researchers need to be aware that changes in economic structure (e.g. factor accumulation and technological change) will alter the calculated values of the TRIs for unchanged trade policy. Therefore, researchers need to adjust the calculated values for TRIs for changes in economic structure if one wants a measure of changes in trade policy only

Should Countries Worry About Immiserizing Growth?

In the presence of tariff protection, Johnson (1967) showed that factor accumulation in a two-good, two-factor model could reduce a country’s real income if it is biased sufficiently toward production of the tariff-protected good. This paper examines the exact conditions under which immiserization could occur in models with more than two goods or factors. In general, adding more goods beyond two seems to reduce the likely of immiserizing growth. This paper also examines how a country’s tariff structure affects the likelihood that it would suffer immiserization. In general, immiserization is more likely the further apart, i.e. the greater the degree of tariff dispersion. This result provides an additional rationale for adopting a uniform tariff structure

Should Countries Worry About Immiserizing Growth?

In the presence of tariff protection, Johnson (1967) showed that factor accumulation in a two-good, two-factor model could reduce a country’s real income if it is biased sufficiently toward production of the tariff-protected good. This paper examines the exact conditions under which immiserization could occur in models with more than two goods or factors. In general, adding more goods beyond two seems to reduce the likely of immiserizing growth. This paper also examines how a country’s tariff structure affects the likelihood that it would suffer immiserization. In general, immiserization is more likely the further apart, i.e. the greater the degree of tariff dispersion. This result provides an additional rationale for adopting a uniform tariff structure

Dispelling Some Misconceptions about Agricultural Trade Liberalization

There has been a great deal of public discussion over the impact that agricultural trade liberalization would likely have, especially on low-income countries. Unfortunately, the public discussion has been characterized by a number of misconceptions. This paper provides a clarifying discussion of the issues involved. Among the key points addressed are 1) agricultural "subsidies" are not nearly as large as has been portrayed; 2) tariffs are actually far more distortionary than subsidies and some low-income countries actually benefit from rich country subsides; and 3) widespread tariff reductions will not inflict large damage on developing countries as a result of preference erosion. The case for removing agricultural trade barriers remains compelling, even without the exaggerations and misconceptions.

Does Import Protection Discourage Exports?

This paper points out that while many developing countries seek to increase their export earnings, they have not embraced fully the notion that their own pattern of import protection hurts their export performance. The paper quantifies the extent to which import protection acts as a tax on a country''s export sector and finds that for many developing countries, the magnitude of the implicit tax is substantial-about 12 percent, on average, for the countries studied. The paper also illustrates the effects of various tariff-cutting scenarios in the Doha Round on export incentives and concludes that, in general, developing countries could increase their export earnings by reducing their own import tariffs, but countries must be careful about how these tariff reductions are achieved. For example, tariff-cutting schemes that exempt certain sectors could actually be harmful.Welfare;Developing countries;Export earnings;Export taxes;Import restrictions;Import tariffs;Protectionism;tariff barriers, tariff reductions, export tax, export sector, export incentives, import protection, imported intermediate, export sectors, exporters, intermediate inputs, developing country exports, price of exports, export disincentives, tariff rates, anti-export bias, tariff rate, export bias, tariff cuts, export performance, agricultural exports, import tariff, world prices, nontariff barriers, tariff structure, equilibrium model, trade flows, world trade, producer prices, export volume, value of exports, price of imports, rates of protection, imported goods, country tariff, global trade, export growth, terms of trade, world price, domestic price, export values, tariff protection, non-tariff barriers, export promotion, export volumes, elasticity of substitution, export barriers, applied tariff, world markets, domestic prices, trade liberalization, global trade analysis, trade barriers, manufactured export, tariff reduction, import barriers, imported intermediates, transport costs, tariff distortions, world trade organization, high tariffs, tariff revenue, quantitative restrictions, constant elasticity of substitution, domestic price of imports, economic integration, indirect tax, world economy, domestic demand, reducing tariffs, exported good, aggregate demand, products exports, imported good, informal export barriers, average import tariff, tariff cut, intermediate goods, tariff equivalents, eliminating tariffs, zero profits, political economy, preferential tariff, tariff equivalent, export goods, perfect substitutes, trade policies, trade patterns, exporter, export industry, import-competing sectors, export promotion strategy, export-oriented industry, goods for export, import-competing producers, imported inputs, export growth rates, duty drawbacks, prices of exports, exported goods, domestic market