Working Paper Series, UCD Centre for Economic Research 05/04
This paper presents a general result for simultaneous reform of tari¤s and quotas in a small open economy, where some of the quota rents do not accrue to domestic residents. Absent highly perverse income e¤ects, welfare must rise following a uniform proportionate reduction in tari¤s and a uniform proportionate relaxation of quotas, weighted by their rent-retention parameters. Previous results are shown to be special cases of this one, and its implications for practical policy advice and its relationship with the policy of 'tarification' of quotas are noted.
International trade policy piecemeal policy reform tari¤s and quotas tarification of quotas trade liberalisation voluntary export restraints trade liberalisation voluntary export restraints.