Trade agreements with domestic policies as disguised protection

• 成果类型: Article
• 署名作者: Lee, Gea M.
• 署名单位: Singapore Management University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2006.05.002
• 发表日期: 2007
• 页码: 241-259
• 关键词: trade agreement; private information; domestic policy; disguised protection

摘要

WTO rules prohibit disguised protection in the form of domestic policies. How then do governments cooperate over trade and domestic policies when none can verify whether a nation's domestic tax reduction is a protective measure or a reaction to a production externality? In this paper, each government privately observes whether a production externality associated with its import-competing good is high or low. This paper finds that in an optimal agreement, disguised protection with domestic policies is never used by governments with a high externality and is never commonly realized. Moreover, in an optimal agreement, tariffs may be conditional on domestic policies. (c) 2006 Elsevier B.V. All rights reserved.