Measuring the restrictiveness of international trade policy / James E. Anderson and J. Peter Neary.

Format:

Book

Author/Creator:

Anderson, James E.

Contributor:

Neary, J. Peter.

Language:

English

Subjects (All):

Commercial policy.

Tariff.

Non-tariff trade barriers.

Foreign trade regulation.

International trade.

Physical Description:

xvii, 320 pages : illustrations ; 24 cm

Place of Publication:

Cambridge, Mass. : MIT Press, [2005]

Summary:

Proposing new theoretically sound indexes for measuring trade restrictiveness, with empirical results that show their application.

Contents:

2 Measuring Trade Policy Restrictiveness: A Nontechnical Introduction 7

2.1 The Trade-Weighted Average Tariff 8

2.2 Alternative Weights: Current or Free Trade? Imports or Production? 11

2.3 Measures of Tariff Dispersion 13

2.4 The Welfare-Equivalent Uniform Tariff 15

2.5 The Import-Volume-Equivalent Uniform Tariff 21

Appendix The Geometry of the Trade-Weighted Average Tariff 24

II Trade Policy Reform and the Tri 25

3 Tariff Reform in General Equilibrium 27

3.1 Household and Firm Behavior 27

3.2 The Trade Expenditure Function 30

3.3 Shadow Prices and the Marginal Cost of Tariffs 31

3.4 Welfare-Improving Tariff Changes: Radial Reductions and Concertina Reform 34

3.5 Welfare and Tariffs: A Diagrammatic Illustration 37

Appendix Welfare-Improving Tariff Changes in a Large Open Economy 42

4 The Trade Restrictiveness Index 45

4.1 The True Cost-of-Living Index 45

4.2 The Balance-of-Trade Function 47

4.3 The Trade Restrictiveness Index 48

4.4 The TRI and the Trade-Weighted Average Tariff I 51

4.5 The TRI and the Trade-Weighted Average Tariff II 55

4.6 The TRI and the Cost of Protection 58

5 The Mercantilist Trade Restrictiveness Index 61

5.1 The MTRI 62

5.2 The MTRI and the TRI 64

5.3 The MTRI and the Trade-Weighted Average Tariff 68

Appendix Properties of the Import Volume Functions 72

6 Trade Reform, Trade Restrictiveness, and Tariff Structure 75

6.1 Generalized Tariff Moments 77

6.2 Welfare and Trade Policy Reform 80

6.3 Welfare Effects of Tariff Reforms That Reduce Dispersion 84

6.4 Market Access and Changes in Tariff Moments 88

6.5 Tariff Changes and Market Access 92

6.6 Changes in the TRI and MTRI and Measures of Tariff Dispersion 97

6.7 Relating Generalized to Observable Moments 101

7 Trade Reform with Tariffs and Quotas 107

7.1 The Distorted Trade Expenditure Function 108

7.2 Rent-Sharing and the Welfare Cost of Quotas 110

7.3 Trade Reform without Restrictions on the Trade Expenditure Function 112

7.4 Restricting the Trade Expenditure Function 115

7.5 Quota Reform 119

7.6 Tariff Reform in the Presence of Quotas 122

7.7 Alternative Rent-Sharing Rules 124

8 The TRI and MTRI with Quotas 131

8.1 The TRI with Tariffs and Quotas 131

8.2 Equi-restrictive Quotas Following Changes in Exogenous Variables 135

8.3 Quotas and the MTRI 137

Appendix A Neutral Growth and the Restrictiveness of Quotas 138

Appendix B Partial Equilibrium Antecedents of the TRI and MTRI 139

9 Alternative Economic Environments 147

9.1 Trade Restrictiveness in a Large Country 148

9.2 External Scale Economies 153

9.3 Monopolistic Competition 156

Appendix A Details of the Two-Country Model 163

Appendix B Multicountry Trade Policy 164

10 Aggregating Trade Restrictions in Modeling 169

10.1 Demand Estimation 169

10.2 Simulation Models 170

10.3 Inference of Trade Costs 174

10.4 Openness and Growth Regressions 185

Appendix Multilateral Resistance in the Generalized Gravity Model 189

11 A General Framework for Measuring Policy Restrictiveness 197

12 Other Policy Distortions 201

12.1 Import Subsidies and Export Distortions 201

12.2 The Trade Restrictiveness of Domestic Distortions 204

12.3 An Application: The Trade Restrictiveness of Mexican Agricultural Policy 212

Appendix A Effects of Factor-Market Distortions 215

Appendix B Complex Trade Policies 218

13 Alternative Reference Points 225

13.1 Sector-Specific Income 225

13.2 Effective Protection in the United States: An Application 241

13.3 Other Sectoral Reference Points 246

14 Quantity Aggregates 249

14.1 The Quantity Analogue of the TRI 250

14.2 The Quantity Analogue of the MTRI 253

14.3 Duality and Policy Distance Functions 253

14.4 Relation to the Coefficient of Resource Utilization 256

14.5 Application I: The Multi-Fibre Arrangement 258

14.6 Application II: The Trade Restrictiveness of US Dairy Quotas 270

15 Measuring Trade Restrictiveness in a Simple CGE Model 275

15.1 The Model 277

15.2 Data and Data Compromises 283

15.3 Measures of Trade Restrictiveness 284

Appendix The CES-CET Model 294.

Notes:

Includes bibliographical references (pages [309]-315) and index.

ISBN:

0262012200

OCLC:

60245578