آزاد سازی تجارت و رفاه:بازارهای کلای متمایز در مقابل بازارهای همگن

In this paper, we examine the effects of liberalization on industrial location and national welfare in a framework of new economic geography. Specifically, we explicitly incorporate arbitrary trade costs in both differentiated-good and homogeneous-good sectors into a two-country model, and clarify the effects of trade-barrier reduction in each sector. We show that their impacts on welfare levels in the two countries are different, and, if an industry is liberalized while the other is protected, a conflict between the countries might occur. Therefore, appropriate liberalization in both sectors is effective to alleviate such a conflict.

In this paper, we examine the impacts of trade liberalization on industrial location and national welfare in a framework of new economic geography (NEG) (Fujita et al., 1999 and Baldwin et al., 2003). Specifically, we explicitly incorporate arbitrary trade costs in both differentiated-good and homogeneous-good sectors into a two-country model, and clarify the effects of trade-barrier reduction in each sector. We show that reducing the trade barrier in the homogeneous-good sector has a different impact on the welfare levels in two countries from reducing the trade barrier in the differentiated-good sector. According to Article XXIV of the General Agreement on Tariffs and Trade (GATT), all free trade agreements (FTAs) should aim to eliminate duties and other restrictive regulations of commerce on substantially all the trade among participating countries. However, in real FTAs, some industries are often protected. For example, the United States excluded about 100 items (e.g., sugar and dairy products) from the liberalized list of a US–Australia FTA in 2005. In addition, Japan carefully protects the agricultural market by imposing high tariffs and is very reluctant to join the Trans-Pacific Partnership (TPP). These facts indicate the necessity to examine how a country’s welfare level changes if some industries are liberalized while others are protected.

This study is an examination of the effects of liberalization (i.e., falling trade costs) on industrial location and national welfare. We use the Helpman–Krugman–Davis model with two countries, one factor, and two industries, both of which incur trade costs. The following results were obtained. First, we found a necessary and sufficient condition for the HME to be observed. The condition is in regard to the trade costs of differentiated and homogeneous goods, and the result is helpful for a comprehensive understanding of some known results throughout the literature. Second, when the differentiated-good markets are more integrated, the number of differentiated-good firms in the larger country (resp. the smaller country) evolves as an inverted-U-shaped curve (resp. a U-shaped curve). Meanwhile, the welfare in the smaller country must be better off, while the welfare in the larger country could be worse off.