DP401 Welfare Costs of US Quotas in Textiles, Steel and Autos

Author(s): Jaime de Melo, David Tarr
Publication Date: April 1990
Keyword(s): General Equilibrium, Quantitative Restraints, Voluntary Export Restraints, Welfare Costs
JEL(s): 122, 421, 422
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=401

This paper quantifies welfare costs and resource shifts that would occur if US quantitative restrictions in textiles, steel and autos were removed. Estimates are derived from a static ten-sector general the equilibrium model of the US economy. The welfare loss from the quantitative restrictions is estimated at approximately 1984 US$20 to their high rent transfer component (about 75%), these restrictions are equivalent (in welfare terms) to an average across the board tariff of 20% such rates were common in the early days of multilateral tariff reduction.