关税优惠和贸易条件与经典模型的推广外文翻译资料

Tariff Preferences and the Terms of Trade amp; Generalization of the Classical Model

The impact of tariff preferences on resource allocation and welfare has been the subject of notable theoretical advances in the past decade,but there is a gap in the literature on the closely related question of their effect on the terms of trade, changes in which might significantly affect the distribution of the gains and losses among members and between the preference area as a whole and the rest of the world. The purpose of this chapter is to fill part of this gap by establishing what appear to be the main propositions valid for an arbitrary number of countries, and to contrast the results with those which derive from the traditional theory of nondiscriminatory tariffs.

A Geometric Model of Three Countries

We make three simplifying assumptions: (1) initial tariffs are low, (2) the contemplated tariff reductions are small, and (3) all exports are gross substitutes in world consumption in the sense that a rise in the price of any countrys exports, all other prices remaining constant, creates an excess demand for the exports of every other country. The significance of these assumptions will be dealt with later.

Consider a three-country system in which A and B denote the prospective member countries and C denotes the rest of the world. The problem is to deduce the changes in the world (relative) prices of the exports of the three countries when the tariff concessions are initiated. The simplest approach to the solution is to investigate, for each tariff reduction in isolation, the changes in the balances of trade on the tentative supposition that international prices remain constant.

Let us examine first the reduction in As tariff on Bs exports. At constant international prices the price of Bs goods in A falls by the amount of the tariff reduction. This price effect, assuming for now that all goods are substitutes in As consumption,shifts demand in A away from home goods and Cs goods onto Bs goods, occasioning an improvement in Bs balance and a worsening of Cs balance. It can also be shown, however, that As balance worsens, since the difference between the improvement in Bs balance and the worsening of Cs balance must equal the change in As balance (by Cournots law that the sum of all balances is identically zero), and because the improvement in Bs balance must exceed the worsening of C s balance by the reduced spending in A on home goods (by Walras law that all excess demands sum to zero within any country). The price effect thus induces an improvement in Bs balance and deteriorations in As and Cs balances.

The price effect, however, is partially offset by the budgetary effect -As government experiences a budget deficit equal to the reduced tariff proceeds, and this deficit must be corrected by decreased government spending or increased taxes. The final result therefore depends on whether or not the change in spending due to the method by which the government restores balance in its budget is sufficient to offset the initial price effect. In principle either result is possible, depending on which taxes are increased or how the government reduces spending, but there is a strong presumption that the initial price effect will dominate. For example, if income taxes are raised, the reduced level of disposable income of the community means that consumers in A will spend less on all goods (in the absence of inferior commodities), but this budgetary effect is exactly equal, for small tariff changes, to the income effect implicit within the initial price effect,leaving only pure substitution terms that work in the same direction as the original price effect. Only in exceptional cases where reduction in government spending is the method used to balance the budget and where it is heavily biased against one of the goods can the budgetary effect dominate. In what follows we shall ignore these exceptional cases.

The tariff reduction, then, tends to improve Bs balance and worsen As and Cs balances at constant international prices. The latter must therefore move, if equilibrium is to be restored, in a direction that worsens Bs balance and improves the balances of A and C. Figure 4-1 provides a method of determining this direction.

The lines AA, BB, and CC trace the loci of the world prices of A and B, relative to the world prices of C, which permit equilibrium (before the tariff changes) in the balances of A, B, and C, respectively.

The Basic Proposition

The diagram can now be used to establish the direction of change in the terms of trade. From the initial equilibrium Q the tariff reduction in A causes the three schedules to shift. At constant international prices, that is, at the point Q, the tariff reduction causes Bs balance to be in surplus and As and C s balances to be in deficit, so world prices must move in a direction which worsens Bs balance and improves those of A and C. In other words, the new point of equilibrium must lie in sector I (Figure 4-1), where, from the point of view of the situation before the tariff change, As and Cs balances are in surplus and Bs is in deficit. The characteristics of sector I therefore outline the changes in relative prices that must take place as a result of the tariff reduction; in this sector Bs price has risen

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