UNSPECIFIED (1994) STRATEGIC TRADE-POLICY AND RETALIATION. In: Meeting of the International-Economics-Study-Group, NOV, 1990, LONDON SCH ECON, LONDON, ENGLAND.

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Abstract

This paper analyses the effect of retaliation with countervailing tariffs on the profit shifting argument for export subsidies. When the domestic country pursues a policy of laissez-faire it may be harmed by a foreign export subsidy. However, when the domestic country pursues an optimal trade policy it will always gain from a foreign export subsidy. The optimal domestic response to a foreign export subsidy is a partially countervailing tariff, and faced with such a response the foreign country will be deterred from subsidising exports. There is no profit shifting argument for an export subsidy when there is retaliation.

Item Type:	Conference Item (UNSPECIFIED)
Subjects:	H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	JAPAN AND THE WORLD ECONOMY
Publisher:	ELSEVIER SCIENCE BV
ISSN:	0922-1425
Date:	March 1994
Volume:	6
Number:	1
Number of Pages:	14
Page Range:	pp. 75-88
Publication Status:	Published
Title of Event:	Meeting of the International-Economics-Study-Group
Location of Event:	LONDON SCH ECON, LONDON, ENGLAND
Date(s) of Event:	NOV, 1990
URI:	http://wrap.warwick.ac.uk/id/eprint/20296

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