Trade Policy:  Some Strategic Considerations
{'Code': '04050100', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Daniel H. Newlon', 'PO_EMAI': None, 'PO_PHON': None}
Because of the continuing integration of the world's economy, the role          of trade policy is very important and likely to increase in importance          in the future.  Pressures in the international market lead to                   institutionalized trade barriers, such as the Multifiber Agreement              restricting trade in textiles, and voluntary export agreements on               steel and automobiles.  An understanding of the effects of tax/subsidy          policies as well as non-tariff trade barriers like quotas is                    fundamental to the formulation of effective trade policy.                                                                                                       This project has two themes.  The first is a study of the information           contained in partial equilibrium models as a guide to formulating               trade policy in oligopolistic markets.  Game theoretic models are               employed to examine qualitative, quantitative, and distributive                 effects of trade policies in these markets.  In such markets direct             trade intervention by the government can have unexpected effects as             the firms react to the trade policies.  These interaction effects can           change the nature of the game, and alter the equilibrium outcome.                                                                                               The second aspect of the project concerns the negotiation of                    agreements under the principle of most-favored nation clauses.  When            might such negotiations have favorable implications for the outcome of          trade policy?  The most-favored nation policy is typically considered           to be a trade liberalizing mechanism rather than a trade restricting            one.  Working against this notion is the fact that such agreements              create a free-ride problem in that countries can receive the benefits           of most-favored nation policies without making the argeement                    themselves.  This is done simply by trading with countries which have           the most-favored nation status.  This project uses a game theoretic             framework to develop both cooperative and non-cooperative models of             international trade incorporating aspects of the most-favored nation            trading envrionment.                                                                                                                                            The theoretical results of these studies are applied to many                    international trading situations including direct policies and regime           changes, auction quotas, trigger prices, and tax and subsidy policies.          %%%                                                                             A very important aspect of U.S. foreign trade is the trade policy set           by the government.  Because of the continuing integration of the world          economy, this aspect is likely to increase in importance in the                 future.  Pressures in the international economy, like voluntary                 exports on steel and automobiles, have tended to cartelize rather than          liberalize international trade.  For this reason, a better                      understanding of the implications of various governmental policies              like taxes and subsidies, as well as non-tariff trade barriers like             quotas is fundamental to formulating effective trade agreements.                                                                                                Using a game theoretic framework, this project analyzes the effects             deriving from government trade policies such as most-favored nation             agreements, quotas and other non-tariff trade barriers, and import              taxes and subsidies.
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{'Code': '1320', 'Text': 'Economics'}
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