A general equilibrium analysis of US foreign trade policy

Abstract

Part 1 Recent issues in U.S. foreign trade policy: policy issues why a general equilibrium model? previous studies of the cost of protection. Part 2 Trade policy analysis in a one-sector general equilibrium model with product differentiation: product differentiation and specialization a one-sector model with differentiated trade comparative statics - a graphical analysis of terms-of-trade, transfer, and tariff changes a digression - choice of numeraire and the real exhange rate costs of protection in the one-sector model trade policy and resource shifts in the presence of product differentiation. Part 3 The basic general equilibrium trade model: overview of the model equations of the basic trade model modeling of quantitative restrictions welfare measure definition of the welfare measure the real exchange rate. Part 4 Quota premium rates and rent capture: who captures the quota rents? quota rent estimates in textiles and apparel quota rent estimates for automobiles from Japan and Europe voluntary export restraints on steel. Part 5 Welfare costs of U.S. quotas in textiles and apparel, automobiles, and steel in the basic model: elasticity specification removing quotas on textiles and apparel removing voluntary export restraints on Japanese automobiles imposing voluntary export restraints on steel joint removal of quotas in the three sectors introducing terms-of-trade effects comparisons with earlier estimates liberalization with endogenous quota permia and sectoral rationing of steel. Part 6 Welfare costs of quantitative restrictions under different factor market assumptions: labour-leisure choice welfare costs of quotas in steel and automobiles in the presence of wage distortions modeling labour unions in the automobile and steel sectors short-run welfare costs of quotas in textiles and apparel, automobiles and steel welfare costs of quotas with international capital mobility the welfare measure and labour-leisure trade-off derivation of labour union wage differential. Part 7 Welfare costs of quantitative restrictions with imperfect competition in automobiles and steel: evidence on economies of scale and pricing rules in steel and automobiles modifications to the basic model to accommodate imperfect competition welfare costs of quantitative restrictions with imperfect competition derivation of the price elasticity of demand. Part 8 Revenue-raising taxes - evaluation of alternative strategies for taxing petroleum industries: recent proposals for taxing petroleum industries adaptation of the basic model to the energy sector revenue and welfare effects of tax proposals efficient taxation of petroleum industries. Part 9 Conclusions: summary of results costs per job protected by quota protection estimated costs of all quantitative restrictions computation of tariffs with a welfare cost equivalent to that of quotas directions for future research.