 Dynamics and Discriminatory Import PolicyCSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick Abstract: Although the General Agreement on Trade and Tariffs prohibits discriminatory import tariffs, GATT rules include means by which this prohibition can be circumvented. The previous literature use static models to show that discriminatory tariffs increase welfare. In a dynamic model, this is not necessarily true. For example, with consumer switching costs, current market share is valuable. In this case, discriminatory tariffs are higher for firms with a higher market share. In expectation of such policies, firms price less aggressively. If switching costs are significant relative to exporting country asymmetries then this adverse affect on incentives can result in lower importing country welfare. This suggests that it might be in the interests of importers to abide by the GATT MFN principle. Keywords: discriminatory tariffs; endogenous protection; switching costs; market share. (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wck:wckewp:07/98 Access Statistics for this paper More papers in CSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick Centre for the Study of Globalisation and Regionalisation (CSGR) University of Warwick Coventry CV4 7AL, U.K.. Contact information at EDIRC. |
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