Potential Pareto-Improving Move Towards Most Favored Nation Tariffs
23 Pages Posted: 22 Dec 2012
Date Written: December 21, 2012
We use a multi-country asymmetric oligopolistic framework for segmented markets to study the welfare effects of reducing tariff discrimination --- which we call a move towards Most Favored Nation tariffs. Both unilateral and multilateral reforms are considered. We investigate this issue under different scenarios such as when initial tariffs are arbitrary and when they are optimal. Conditions under which such harmonization are potentially Pareto-improving are derived. We also analyze the effects on individual countries.
Keywords: Tariff reform, MFN, Welfare, Asymmetric Oligopoly
JEL Classification: F10, F11, F13
Suggested Citation: Suggested Citation