سیاست تجاری: اثر خانه بازار در برابر اثرات جانبی شرایط تجارت

We study trade policy in a two-sector Krugman (1980) trade model, allowing for wage, import and export subsidies/taxes. We study non-cooperative trade policies, first for each individual instrument and then for the situation where all instrumentscan be set simultaneously, and contrast those with the efficient allocation. We show that in this general context there are four motives for non-cooperative trade policies: the correction of monopolistic distortions; the terms-of-trade manipulation; the delocation motive for protection (home market effect); the fiscal-burden-shifting motive. The Nash equilibrium when all instruments are available is characterized by first-best-level wage subsidies, and inefficient import subsidies and export taxes, which aim at relocating firms to the other economy and improving terms of trade. Thus, the dominating incentives for non-cooperative trade policies are the fiscal-burden-shifting motives and terms-of-trade effects.

The aim of this paper is to study optimal trade policy in the canonical two-sector Krugman (1980) model, where one sector is characterized by monopolistic competition, increasing returns and iceberg trade costs, while the other features perfect competition and constant returns. Within this framework we allow for wage, import and export subsidies/taxes. We study non-cooperative trade policies, first for each individual instrument and then for the case where all instruments are set simultaneously, and contrast those with the efficient allocation. The common wisdom of the literature1 (Venables (1987), Helpman and Krugman (1989), Ossa (2011)) is that in this model unilateral trade policy is set so as to agglomerate firms in the domestic economy in order to reduce transport costs. This reduces the domestic price index thereby increasing domestic welfare.2 According to the literature, this delocation motive (also called home market effect) provides a reason for protectionist and ultimately welfare detrimental unilateral trade policy in the Krugman (1980) model and, as argued by Ossa (2011), gives an alternative theoretical justification to the neoclassical terms-of-trade externality explanation (Johnson (1953-1954), Grossman and Helpman (1995) and Bagwell and Staiger (1999)) as to why countries need to sign trade agreements.

n this paper we have studied first-best and Nash trade policies in a two-sector Krugman (1980) model of intra-industry trade, considering wage, import and export taxes as policy instruments. It is common wisdom that in this model non-cooperative trade policies are set in order to try to agglomerate firms in the domestic economy, which reduces transport costs for domestic consumers thus lowering the domestic price level (delocation motive). Contrary to the results of the previous literature, we show that in this model the delocation effect is not a dominating motive for non-cooperative trade policy choices once policymakers are allowed to use wage, import and export taxes strategically. Instead, they are driven by the desire to eliminate monopolistic distortions, by the terms-of-trade externality and by the fiscal-burden-shifting externality. Indeed, due to monopolistic competition, in the free trade equilibrium there are too few firms in the differentiated sector and this affects policymakers’ incentives in a crucial way.