Abstract
In a recent article Bhagwati and Hansen (1973) modify the traditional international trade model to include the possibility of smuggling. A basic conclusion of their analysis is that smuggling to evade an import tariff need not improve economic welfare. This note has two objectives: first, to show that this result does not carry over to quantitative restrictions, despite their commonly held equivalence (Section I); second, to show that under quantitative trade restrictions, by using the analogy with the theory of preferential trading provided by Bhagwati and Hansen, preferential trade will not be tradediverting 'Section II).
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