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David R. Collie - One of the best experts on this subject based on the ideXlab platform.
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A Rationale for the WTO Prohibition of Export Subsidies: Strategic Export Subsidies and World Welfare
Open Economies Review, 2000Co-Authors: David R. CollieAbstract:This article presents a model that provides an economic rationale for multilateral agreements, such as the WTO, that prohibit Export Subsidies. The model is a multicountry version of the well-known Brander and Spencer (Journal of International Economics (1985) 18, 83–100) analysis of profit-shifting Export Subsidies, with the addition of an opportunity cost of government revenue greater than unity, as in Neary (Journal of International Economics (1994) 37, 197–218) to capture the fact that the Export subsidy will typically be funded by distortionary taxation. It explains the unilateral incentive for welfare-maximizing governments to provide Export Subsidies and shows how the multilateral prohibition of Export Subsidies may increase world welfare.
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A Rationale for the WTO Prohibition of Export Subsidies: Strategic Export Subsidies and World Welfare
Open Economies Review, 2000Co-Authors: David R. CollieAbstract:This article presents a model that provides an economic rationale for multilateral agreements, such as the WTO, that prohibit Export Subsidies. The model is a multicountry version of the well-known Brander and Spencer (Journal of International Economics (1985) 18, 83–100) analysis of profit-shifting Export Subsidies, with the addition of an opportunity cost of government revenue greater than unity, as in Neary (Journal of International Economics (1994) 37, 197–218) to capture the fact that the Export subsidy will typically be funded by distortionary taxation. It explains the unilateral incentive for welfare-maximizing governments to provide Export Subsidies and shows how the multilateral prohibition of Export Subsidies may increase world welfare. Copyright Kluwer Academic Publishers 2000
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BILATERALISM IS GOOD: TRADE BLOCS AND STRATEGIC Export Subsidies
Oxford Economic Papers, 1997Co-Authors: David R. CollieAbstract:This paper considers the effect of exogenous trade bloc enlargement in a multicountry version of the Brander-Spencer Export subsidy game. In the single-shot game, it is shown that trade bloc enlargement leads to a reduction in the Nash equilibrium Export Subsidies and thereby increases the welfare of the Exporting countries. Although the welfare of the importing countries decreases, world welfare may increase if the Export Subsidies are financed by distortionary taxation. When the Export subsidy game is infinitely repeated, it is shown that trade bloc enlargement reduces the critical discount factor making it easier to sustain free trade. Copyright 1997 by Royal Economic Society.
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profit shifting Export Subsidies and the sustainability of free trade
Scottish Journal of Political Economy, 1993Co-Authors: David R. CollieAbstract:This paper analyzes trade wars and the sustainability of free trade in the J. A. Brander and B. J. Spencer (1985) model of profit-shifting Export Subsidies. It is shown that both countries will usually be worse-off if there is a trade war than under free trade but that one country may be better-off if its firm is very competitive. In an infinitely repeated version of the Brander-Spencer game, it is shown that free trade is sustainable as a perfect equilibrium if the two countries are sufficiently similar and the discount factor is sufficiently large. Copyright 1993 by Scottish Economic Society.
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Export Subsidies and countervailing tariffs
Journal of International Economics, 1991Co-Authors: David R. CollieAbstract:This paper analyses how retaliation affects the profit-shifting argument for Export Subsidies. At the first stage the foreign country sets its Export subsidy and then at the second stage the domestic country sets its tariff and/or production subsidy. It is shown that if the domestic country pursues an optimal trade policy, then it will always gain from a foreign Export subsidy. When the domestic country uses a tariff and a production subsidy, the optimal foreign policy is an Export subsidy, but if the domestic country only uses a tariff, then an Export tax is usually the optimal policy.
Harry De Gorter - One of the best experts on this subject based on the ideXlab platform.
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Export Subsidies: agricultural policy reform and developing countries
2003Co-Authors: Harry De Gorter, Merlinda D. Ingco, Lilian RuizAbstract:Export Subsidies, like import taxes, highly distort trade. Consequently, the WTO should act vigorously to achieve their phaseout. Commitments in the Uruguay Round Agreement on Agriculture (URAA) on Export competition focused mostly on explicit taxpayer financed Export Subsidies. Twenty-five countries agreed to limits on and reductions in both the volume and value of Export Subsidies (and the prohibition of new Subsidies) for 23 product categories. Each country committed to reduce the volume of subsidized Exports by 21 percent over 6 years from the 1986-90 base period level (14 percent over a 10- year period for developing countries), and reduce the value of Export Subsidies by 36 percent (24 percent for developing countries). Temporary exemptions for developing countries allow Subsidies for marketing, cost reduction and transport, while the least developed countries are not subject to reduction commitments at all.
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Export Subsidies and WTO trade negotiations on agriculture: issues and suggestions for new rules
2002Co-Authors: Merlinda D. Ingco, Lilian Ruiz, Harry De GorterAbstract:This paper reviews and evaluates developments in agricultural policies since the Uruguay Round in the context of commitments made under Export competition (through the use of Export Subsidies). An overview of policy developments is presented to evaluate the effectiveness of the disciplines imposed. Issues and suggestions for new multilateral rules are presented in order to improve disciplines in agricultural Export Subsidies for the current WTO trade negotiations. Export subsidy commitments include limits on both expenditures and physical quantities. Several policies escape discipline including food aid, consumer only financed Export Subsidies, and Export credit. Expenditures may have decreased because of world market developments rather than trade liberalization efforts. Price discrimination with revenue pooling is identified as a major source of Export Subsidies and needs to be enforced in future negotiations. Export credit programs imply taxpayer outlays for expected defaults and so can have major impacts on Exports because of the risk reduction effects. Aggregation across products and time may have allowed countries to circumvent specific commitments.
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The definition of Export Subsidies and the agreement on agriculture
2000Co-Authors: Isabelle Schluep, Harry De GorterAbstract:This paper identifies three types of Export Subsidies: taxpayer, consumer only, and producer financed. A consumer only financed Export subsidy involves price discrimination and revenue pooling. The paper showw that consumer only financed Export Subsidies are more trade distorting than taxpayer financed Export Subsidies. Domestic price discrimination alone is a consumer tax. The paper describes the conditions under which price discrimination for a non-traded product like fluid milk but not for a traded product also constitutes an Export subsidy. Price discrimination in world markets combined with revenue pooling in the domestic market is a production subsidy (like New Zealand Dairy Board practices). The paper shows that producer financed Export Subsidies can only exist if a consumer only or a taxpayer financed Export subsidy is in place first. Trade distortion with a producer tax on a taxpayer financed Export subsidy differs from that of a tax on a consumer only financed Export subsidy. The WTO Panel ruling on Canadian dairy pricing for three milk classes is shown to be inconsistent with the economic definition of Export Subsidies. The paper concludes that Export Subsidies are inadequately dealt with in the Agreement on Agriculture, the Agreement on Subsidies and Countervailing Measures, and Article XVI of the GATT 1994.
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THE IMPACTS OF Export SUBSIDY REDUCTION COMMITMENTS IN THE AGREEMENT ON AGRICULTURE
2000Co-Authors: Lilian Ruiz, Harry De GorterAbstract:The effectiveness of limits and reductions in both Export volumes subsidized and value of Export Subsidies in agriculture is evaluated. A perspective on consumer versus producer financed Export Subsidies is given. We analyze factors affecting the effectiveness of volume versus value commitments. Statistical analysis of EU Export Subsidies analyzes the mean and variance of bindings.
Yu-ter Wang - One of the best experts on this subject based on the ideXlab platform.
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On the simultaneous elimination of Export Subsidies under oligopoly
Applied Economics, 2009Co-Authors: Yu-ter WangAbstract:This article extends the model of Brander and Spencer (1985) to study whether the simultaneous elimination of Export Subsidies is feasible. It is shown that the incentive for subsidizing Exports to reoccur will exist when all subsidizing countries are forced to withdraw their Subsidies on Exports simultaneously.
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Export Subsidies, countervailing duties, and welfare
Revista de Economia Política, 2005Co-Authors: Yu-ter WangAbstract:Using a simple Cournot duopoly model, this paper provides an important policy implication for trade disputes involving Export Subsidies. In this paper, the possibility that a foreign Export subsidy could benefit the domestic country as well as the foreign country by appropriately using countervailing duties is identified.
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countervailing duties foreign Export Subsidies and import tariffs
The Japanese Economic Review, 2004Co-Authors: Yu-ter WangAbstract:Given that countervailing duties and import tariffs are set in different ways and for different purposes, I re-examine the relationship between countervailing duties, foreign Export Subsidies and import tariffs under imperfect competition. I find that (i) the optimal countervailing duty depends on the existing import tariff level; (ii) the optimal import tariff is so high that the optimal countervailing duty is zero and hence foreign Export subsidization occurs; and (iii) it is more likely for countervailing duties to be imposed on a foreign firm whose government takes no action when other foreign countries reduce or eliminate their Subsidies on Exports.
Alexander W. Hoffmaister - One of the best experts on this subject based on the ideXlab platform.
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The Cost of Export Subsidies: Evidence from Costa Rica
Staff Papers - International Monetary Fund, 1992Co-Authors: Alexander W. HoffmaisterAbstract:A model is developed to estimate the effects of Export Subsidies on the supply of Exports. With data for Costa Rica over the 1980s, it is shown that although the Export subsidy scheme in operation led to an increase in Exports, the direct fiscal costs of the scheme were substantial. Furthermore, the subsidy scheme led to a significant increase in imports. These results suggest that elimination of Export Subsidies would not have a particularly harmful effect on the trade balance, and would, in addition, increase the fiscal position and generate economic efficiency.
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The Cost of Export Subsidies: Evidence From Costa Rica
IMF Working Papers, 1991Co-Authors: Alexander W. HoffmaisterAbstract:This paper develops a model to estimate the effects of Export Subsidies on the supply of Exports. Using data for Costa Rica over the 1980’s, it is shown that while the Export subsidy scheme in operation led to an increase in Exports, the direct fiscal costs of the scheme were quite large. Furthermore, the subsidy scheme led to a significant increase of imports. These results suggest that elimination of Export Subsidies would not have a particularly harmful effect on the trade balance, and would increase the fiscal position and generate economic efficiency besides.
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Credibility and the Cost of Export Subsidies
IMF Working Papers, 1991Co-Authors: Alexander W. HoffmaisterAbstract:Recurring balance of payments crises in countries that pursued import substitution have led some of them to establish a variety of Export incentives, in particular Subsidies, as a way to revive and re-orient their economies. However, Exporters are likely to be uncertain of the government’s commitment to Export promotion because of the years of neglect. This paper analyzes the issue of the credibility of Export Subsidies and suggests that a government is able to convince Exporters of its commitment only at a cost, which reduces the attractiveness of promoting Exports by means of Subsidies.
Nikhil Damodaran - One of the best experts on this subject based on the ideXlab platform.
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Export Subsidies and Interdependence in Euro Union: Beggar Thy Neighbor?
2016Co-Authors: Nikhil DamodaranAbstract:We examine the inter-linkages between economies in the European Monetary Union. We work through a baseline New Keynesian Model and include Export Subsidies into the analysis. Theoretically, it is plausible to have a beggar thy neighbor expansion of the core at the cost of periphery.
