Table of Contents

Handbook on International Trade Policy

Handbook on International Trade Policy

Elgar original reference

Edited by William A. Kerr and James D. Gaisford

The Handbook on International Trade Policy is an insightful and comprehensive reference tool focusing on trade policy issues in the era of globalization. Each specially commissioned chapter deals with important international trade issues, discusses the current literature on the subject, and explores major controversies. The Handbook also directs the interested reader to further sources of information.

Chapter 18: Trade and Domestic Policy: Conduct and Modeling

John Whalley

Subjects: economics and finance, international economics


John Whalley Introduction It is widely acknowledged that the complexity of domestic policy interventions, which influence trade flows and are now the subject of substantial international negotiation, are different in their effects from those of tariffs that are widely analyzed by trade theorists. This is especially the case in such areas as services, competition policy, environmental regulation, product standards, professional accreditation, movement of persons and transportation regulation. It also applies to those areas of agricultural policy where the trade impacts are often significant, despite the commitments in the Uruguay Round to tariffy all border measures relating to agricultural trade. Despite such acknowledgments, however, it remains commonplace in numerical simulation exercises to analyze the impacts of potential changes in these policies using ad valorem equivalent tariff treatment even though estimated impacts using explicit policy representation and ad valorem equivalent treatments will differ. The difficulty for modelers is that the detail and subtlety embodied in this wide array of policy interventions means that some simplification is appealing. In addition, no meaningful general propositions exist in the theoretical literature as to the sign or size of the differences in predicted effects. All that can seemingly be done is to investigate the differences case by case, but even here the findings are sensitive both to the particular form of model used as well as the model parameterization employed. As a result, there is relatively little in the literature that provides guidance as...

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