1Chapter9NontariffTradeBarriersandtheNewProtectionismimportquotavoluntaryexportrestraintsdumpingexportsubsidiesinfant-industryargumentstrategictradepolicy29.2importquotasquota:adirectquantitativerestrictionontheamountofacommodityallowedtobeimportedorexported.AbsoluteQuotasTariffQuotasGlobalQuotasCountryQuotas3Figure9.1:partialequilibriumeffectsTheeffectisidendicaltoequivalentimportquota.9.2AeffectsofanimportquotaPSDMWelfarechangeP.S.+aC.S.–(a+b+c+d)Quotarent+cNet-(b+d)4Quotaquotarent59.2BcomparisonofanimportquotatoanimporttariffDifferences1.ChangesindomesticsupplyanddemandTariffdomesticMPnochangeExample:domesticdemandincreaseQuotadomesticPMnochange2.Quotainvolvesthedistributionofimportlicenses.69.3othernontariffbarriersandthenewprotectionism9.3Avoluntaryexportrestraints,VERs“”79.3DdumpingDifferenttypesofdumping:persistentdumpingpredatorydumpingsporadicdumpingConditionsrequiredfordumping:•••89.3Eexportsubsidies:DirectsubsidieshighsupportpricesofEUIndirectsubsidiestaxreliefCountervailingduties(CDVs):9Figure9.2:partialequilibriumeffectofanexportsubsidyFromfreetradetoexportsubsidy,PSDXWelfarechangeP.S.a’+b’+c’C.S.–(a’+b’)Governmentsubsidy–(b’+c’+d’)Net–(b’+d’)1011OthernontarifftradebarriersGovernmentProcurementPoliciesofDiscrimination(buy-nationalpolicies),ForeignTradeUnderStateMonopoly,TechnicalBarrierstoTrade,ForeignExchangeControl129.4thepoliticaleconomyofprotectionism9.4Binfant-industryargument:temporarytradeprotectionduringits“infancy”untilitcanmeetforeigncompetition.13¾¾¾importantqualifications:149.4Cwhogetsprotected?Producers:Highlyorganizedindustriespressure-group.Geographicallydecentralizedindustriesthatemployalargenumberofworkers.159.5strategictradeandindustrialpolicies9.5Astrategictradepolicy169.5strategictradeandindustrialpolicies9.5Astrategictradepolicy