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Nontariff Barriers and Trade Liberalization
Author(s) -
Anderson Simon P.,
Schmitt Nicolas
Publication year - 2003
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/41.1.80
Subject(s) - stylized fact , economics , tariff , international economics , free trade , liberalization , international trade , incentive , commercial policy , microeconomics , macroeconomics , market economy
This article shows that governments have no incentive to introduce nontariff barriers (NTBs) when they are free to set tariffs but they do when tariffs are determined cooperatively. Quotas are preferred to antidumping restrictions so that the model is consistent with a progression from using tariffs only to quotas and then to antidumping constraints (when quotas are eliminated). There is a corresponding narrowing of the range of industries affected by trade restrictions. Simulating the model, the degree of tariff liberalization and of replacement of tariffs by NTBs are shown to depend on industry characteristics in line with stylized facts.