Trade Policy and Price-Based Barriers

Debashis Chakraborty and Oindrila Dey ()
Additional contact information
Debashis Chakraborty: Indian Institute of Foreign Trade
Oindrila Dey: Indian Institute of Foreign Trade

Chapter Chapter 2 in Influence of WTO and Global Dynamics on Trade Flows, 2024, pp 183-244 from Springer

Abstract: Abstract According to trade theoretic standpoint, in the aftermath of policy reforms, the exporting sectors of a country may expand production, while the import-competing sectors will witness a downslide. However, in real world, the threat of competition from cheaper imports is considerable threat for local players, particularly the small and medium enterprises (SMEs), who may take recourse to lobbying. The argument is that imposition of tariffs on the import-competing sectors would enhance their production and consequently ensure higher returns to the factors most intensively used therein. It may also enable them to reach the economies of scale in their production. The persistence of relatively higher manufacturing tariffs in several countries during the GATT period and the subsequent WTO regime can be explained by the deep influence of the optimal tariff argument on their policymakers. The other policy instruments, e.g., offering subsidy to local players for protecting them, or implementing a weaker environmental standard that can lead to lower compliance requirement, have also been discussed at WTO frequently. While the welfare consequences of any trade policy intervention might vary across countries, depending on the strength of their natural or acquired advantages, excessive recourse to protectionism can lead to trade distortions and dead-weight losses.

Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-7375-0_2

Ordering information: This item can be ordered from
http://www.springer.com/9789819973750

DOI: 10.1007/978-981-99-7375-0_2

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().