Import tariffs and export subsidies in the World Trade Organization : a small-country approach
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2012Contributor/ s
Potipiti, Tanapong
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RT Generic T1 Import tariffs and export subsidies in the World Trade Organization : a small-country approach A1 Potipiti, Tanapong YR 2012 LK https://hdl.handle.net/20.500.12870/1525 PB United Nations AB <p></p> By Tanapong Potipiti <br> This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies. OL English(30) TY - GEN T1 - Import tariffs and export subsidies in the World Trade Organization : a small-country approach AU - Potipiti, Tanapong Y1 - 2012 UR - https://hdl.handle.net/20.500.12870/1525 PB - United Nations AB - By Tanapong PotipitiThis paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies. @misc{20.500.12870_1525 author = {Potipiti, Tanapong}, title = {Import tariffs and export subsidies in the World Trade Organization : a small-country approach}, year = {2012}, abstract = { By Tanapong Potipiti
This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies.}, url = {https://hdl.handle.net/20.500.12870/1525} } @misc{20.500.12870_1525 author = {Potipiti, Tanapong}, title = {Import tariffs and export subsidies in the World Trade Organization : a small-country approach}, year = {2012}, abstract = { By Tanapong Potipiti
This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies.}, url = {https://hdl.handle.net/20.500.12870/1525} } TY - GEN T1 - Import tariffs and export subsidies in the World Trade Organization : a small-country approach AU - Potipiti, Tanapong UR - https://hdl.handle.net/20.500.12870/1525 PB - United Nations AB - By Tanapong Potipiti
This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies.
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ARTNeT Working Paper
No. 119, September 2012
No. 119, September 2012
Abstract
By Tanapong Potipiti
This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies.
This paper develops a simple small-country model to explain why the World Trade Organization (WTO) prohibits export subsidies but allows import tariffs. Governments choose protection rates (import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs decrease due to the progress of trade liberalization and lower transportation costs, import-competing sectors decline but export industries grow. In the growing export industries, the surplus generated by protection is eroded by new entrants. Therefore, the rent that governments gain from protecting the export sectors by using export subsidies is small. On the other hand, in the import-competing sectors, capital is sunk and no new entrants erode the protection rent. Therefore, governments can get large political contributions from protecting these import-competing sectors. This paper shows that under fast capital mobility, governments with a high bargaining power are better off than with a trade agreement that allows import tariffs but prohibits export subsidies.