Commercial Policy, ‘True’ Tariffs and Relative Prices

One of the manifestations of the ‘new’ protectionism is the sharply increased concern over ‘dumping’ which comes precisely at a time when several countries, particularly the developing countries, have implemented export-promotion policies in the form of direct or indirect export subsidies. One suspects that many of these subsidies do no more than compensate for the damaging relative-price effects of pre-existing protectionist policies; to the extent that, if this is true, the dumping that is taking place is more apparent than real in that there exists an alternative foreign trade regime that would: (i) eliminate direct as well as indirect export subsidies; and (ii) leave the existing relative price structure roughly unaffected. This paper is addressed to that (and other) issues in the general area of the relative price effects of commercial policy. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.