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Abstract:
This paper studies the relationship between firms’ profits and countervailing duties in vertically related markets characterized by oligopolies. It is shown that a countervailing duty equal to the foreign export subsidy is required to neutralize the impact of foreign export subsidies on the domestic firms’ profits. The domestic country has an incentive to impose a countervailing duty on the foreign final good even though the foreign government only subsidizes exports of the intermediate good. Additionally, the foreign exporting firms may benefit from a countervailing duty more than a foreign export subsidy.

profits, countervailing duties, vertically related markets

Abstract:
In a simple three-country model where two countries sign a free trade agreement eliminating restrictions on trade and investment between them, this paper shows that any benefits accruing to the investing country from engaging in outward FDI will depend on the difference between the net return from investing in the third country and the equilibrium return on investment between the two signatories, as well as the direction of the initial capital flow between the signatories. Furthermore, the spillover effect created by the outward FDI may benefit the other signatory that initially owns some of the capital stock of its counterpart.

Outward FDI, Free Trade Agreement

Abstract:
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.

Abstract:
By using a Cournot model where a domestic firm competes with a foreign firm in the domestic market, this paper suggests that, in addition to countervailing duty measures allowed by the World Trade Organization, product differentiation between the goods produced by the domestic and foreign firms could be considered as a way of eliminating foreign export subsidies.

Product differentiation, foreign export subsidies, countervailing duties (CVDs)

Abstract:
By using an n-firm Cournot model, this article examines the relationships among the number of domestic and foreign firms, the product differentiation between the domestic and foreign firms and an import tariff. It is shown that the relative number of domestic and foreign firms as well as the degree of product differentiation between the domestic and foreign firms indeed affects the level of the tariff on imports. Furthermore, whether or not an increase in product differentiation between the domestic and foreign firms reduces the level of the import tariff is dependent on the relative number of domestic and foreign firms.

Number of firms, International product differentiation, Tariff, Cournot

Abstract:
This paper 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.

Export subsidies, Multi-firm model, WTO