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Export subsidies and countervailing tariffs

Collie, David Robert 1991. Export subsidies and countervailing tariffs. Journal of International Economics 31 (3-4) , pp. 309-324. 10.1016/0022-1996(91)90041-4

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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.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: Elsevier
ISSN: 0022-1996
Last Modified: 04 Jun 2017 06:37

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