|
The objectives of Research Fellow Joseph Francois and Will
Martin in Discussion Paper No. 1214 are twofold: first, to move the
notion of protection and trade liberalization away from one based
primarily on fixed policy instruments and closer to one that involves
policy regimes subject to uncertainty and variability; and second,
within this context, to offer a relatively simple approach to evaluating
the benefits of rules-based commitments. As a basis for evaluating the
liberalization of stochastically varying protection, they develop a
simple framework based on the expected cost of protection. Within this
conceptual framework, it is possible to assess the relative impact of
tariff bindings on the total costs of protection for individual
commodities, through calculation of welfare-weighted costs of protection
indices. The authors examine the effect of tariff bindings on imports of wheat, sugar and beef. Although tariff bindings on these important agricultural commodities have been typically set at levels substantially higher than the average rates of protection, it seems likely that the introduction of tariff bindings will yield substantial reductions in the costs of protection on a broad range of such commodities. Multilateral Trade Rules and the Expected Cost of Protection Joseph F Francois and Will Martin Discussion Paper No. 1214, July 1995 (IT) |