I set up a linear model of a cross-hauling, Cournot duopoly. Even where countries are small, there
exists a motive for protection to achieve a profit-shift and to raise revenue. Where the protection
is of tariff form, then the protection will only totally exclude the foreign firm for a limited set of
parameter values. By contrast, where the protection takes the form of a horizontal technical barrier
to trade (HTBT), the government will always exclude the foreign firm. Where there is no constraint
on imposing tariffs, these will always be preferred to the HTBT. However, if tariff reductions are
imposed by international agreement without simultaneous restrictions on HTBTs, then reductions
below a threshold level will trigger imposition of an HTBT sufficient to totally exclude the foreign
firm
