Measuring Restrictiveness of Bilateral Trade Policies: A Comparison Between Developed and Developing Countries
Review of World Economics, Vol. 2, 2008
Posted: 9 Apr 2009
Date Written: April 9, 2009
This paper compares the degree of openness to trade of three developed countries markets-the European Union, Japan, the United States-with that of three middle-income countries, namely Brazil, India, and China. A theoretically consistent protection measure - the Mercantilistic Trade Restrictiveness Index (MTRI) - is employed to average tariffs at different levels of aggregation. The computation relies on a comparative static applied general equilibrium model (Global Trade Analysis Project-GTAP) featuring imperfect competition as well as on the bilateral applied tariffs included in the most recent version of the GTAP database. Results provide a different picture from what could have been expected given the widely publicized diffusion of preferential schemes supposedly favoring developing countries exports.
Keywords: Commercial policy, trade negotiations, computable general equilibrium models, agriculture in international trade
JEL Classification: F17, C68, Q17
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