EconPapers    
Economics at your fingertips  
 

Gains from Trade Liberalization with Imperfectly Competitive World Markets. A Note

Giovanni Anania (ganania@unical.it)

No 24971, 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists

Abstract: The paper shows how analyses assuming perfect competition can yield a distorted estimation of the expected effects of a trade liberalization when market imperfections exist. The analytical framework adopted is very simple and three extreme imperfect market structures are considered. In the first case, the exporting country maximizes its producer and consumer surplus by intervening in the world market. The second market imperfection considered is the existence of a private firm playing the role of "pure middleman" in the world market. Then the case of a producer-owned marketing board which is granted exclusive export authority is addressed. It is shown that under all three scenarios, if perfect competition is assumed when market imperfections exist, the impact of a tariff reduction on prices and volume traded is overestimated. A ranking of the size of such distortions in the three cases analyzed is provided. Finally, it is proved that when a private firm exerts monopoly and monopsony power in the world market, both the importing and the exporting countries may well be better off if, rather than making a move towards trade liberalization, the importing country "compensates" the exporting country by means of a direct transfer.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 15
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/24971/files/cp02an18.pdf (application/pdf)

Related works:
Journal Article: Gains from trade liberalization with imperfectly competitive world markets. A note (2003) Downloads
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:ags:eaae02:24971

DOI: 10.22004/ag.econ.24971

Access Statistics for this paper

More papers in 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search (aesearch@umn.edu).

 
Page updated 2025-03-19
Handle: RePEc:ags:eaae02:24971