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sformation

curve =
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2/3

were 4.1
probably
In "During
4.4 4.3 4.2 4.1
the 4.5
primarily
INTRODUCTION
1840,
the the 4.4.1
Non-Tariff
Barriers 4.3.1 Barriers
4.2.1Tariff
Barriers 4.2.4 4.2.3 4.2.2IntroductBon
OtherNon-Tariff
India 4.4.6 4.4.5 4.4.4 4.4.3 4.4.2
easiest
the eighteenth
teachipgs used and
existing to Non-Tariff Dumping
International
Subsidies
Export
Strategic Technical,
CartelVoluntary QuotaCountervailing
Optimum Duties Types
Equilibrium
Tariff Tariffof
raise and
of
Government at Policy
thmeans
e the Barriers
Trade AdministrativeExport
Analysis
by
classical beginning
Restraints
which of
a
economists revenue. and Tariff
Government of (VER)
the other
The
nineteenth Regulations
started taxing
may
acquire of
to century,
bear imports
fruits
income. tariffs
was
in
policies interest footwear":
This Every and with
tariff
largely been fallen.
Protectiunis1m
has impedimentsleading The tariffs.
increased. trade introduced. Germany
hedid period
nation, the agriculture.Russia. invasion two Soon,period.
ofbeen ofits barriers
concentrated on period gave not this trade aspathOthers purposes)
towards
developed impediments. Capitalists
which agricultwasure their 4.2
the manufactured industrial specific fairly aand
in. want however, was
producers
observed
countries, inspite to However, between and of This of European helped home
is to Further, stagnant
France to the also lowered
protcctionist free
trade. not trade France The was factors became and
world, on listen predominant.
demands trade
of always otherEuropean
made English country,
primarily and The nations, since The the
have also
during already
countries, workers
abolished,
of several trade started
to trade in aand
often goods. was free-trading
course,
consumers. less-developed 1930s
the
world revised them. possible the agriculture England.
between bad. been Continent for nation, low from joincd
has the tothe the
in
benefits under Even Second wars But, ask
1870s, a
World especially and
The especially world
depression more tariffs
varying the in
abolished been her1880s by 1850s
the saw asfor which though the
forces Income
less
that majority World by
railways,protectionist trade in nation. were
th e
protection.
tradetariffs hadyet famous
developingHence, from
guise towards a cheap France
the toagainst
in countriesdeveloped
case, and a abolished.
the
War,
wasdrastic policy need of helped grew trend1860s. taxes
degrees, barriers free of of on 1873-79, First
there the a for known. steamships grain and the Corn
nations. trade, 'managed the trade period
the increase iron At at were
still Government in protectionism. policy towards
anGermany, The World
are
countries post average trend, the first from land-owning
England Laws
goods and extremely United introduced,
are tries face Distressed the
As trade' still warliberalisation. when in 1890s foodBismarck
longest the were War werc
created levelespecially and the
are result a to barriers important tariff among tariffs United heard. followed continued
States International
as (LDCs), protectionism
of products
and income innovations liberalisation
during
rate
fast (for class.repealed
prevented protect in indeepest
and One
to cuts tariffs farmers alone all protection
ofsuch trade. and increased Germany States There
textiles trade to Many was England's practical its The
the non and have other were grew,
has and were stood coursetariffs 1846.in Business
in in the
of
of

domestic shift can Firstly, byalsoWalls produced


lack competition. used those products increased
ofconsumersWhilecommodity tariffs the aThe 4.2 such taxes levy
WTO trade. instruments. the The non-tariff from
or TradebarriersInstruments
the 'list organisations
of threaten by protection words term as is
tariffs primary commerce.
role
production for as BARRIERS
of TARIFF barriers moving
regulations tariffs
countries moretariffsofcommodities abroadinternational distortions prices, quotas
reduced. and On of are
industries controlling
commodities competition. can of táriff' consequentand account tariffs barriers. of
Dominickas imposed
domestic The advanced in it book and like
reasons Therefore, can freely Trade
abroad are to are the Still cho crosses has Becausetaxes in
export Worl
ofd be on Control
ofbeen on
multilateral internationalThese.estrictions according
allow often possibility used fulfill used and whichactual tariff from.ose trade theto
in Salyatore, global broadly the
industries.
to economies not With a rates. of Trade for these
foreign to the
compete is free
national derived restraints.imported the
complain cut protect the regulating practice. It In
this, imports.
used freeincreases integration, e to
costs, offollowing only domestic also market. Arabic,
increased "A countriesagreements
as from
Organisationdecline trade knownarclassified
companies These with by or thdecreases goods. differences
Barriers
which etrade, boundary."tariff
as domestic developing international arUnder e the the has affect
to developed market. most ta'rifmeans is as under
domestic objectives. expected domestic number is Italian haveThus, it the
competition
howmeans this a becomes
to common the Neo tax between(WTO) declined global the two to in
exports
cost or world
shifted the evolution nations'
trade relative
produce poor employment economics trade. In form,
industries. in heads:
higher units this toindustries ofclassical duty to likelihood difficult designed are
working competeduties as goods of notify to
the nodern
or
from manner, wel l those levied tariffa, governments international quite prices.
goods
unemployment, may non-tariff ofcommercial tariff
are economists or for to times.
conditions imported
fire against (LDCs),
Tariffs with popular goods
ascan that
announce. on which ofinternational
a
enhance uncommon. Most
barriers
more tariffs imposed the retaliatory country
workers the shipdomestic barriers, One policy of
are but through traded means under 4.3
foreign trade and the
cheaply. goods used
can hone form their view to
free of
are be on In
and The or
regiontainted withpopulation.
allowedon Secondly, The However, a 4.4
long, France
retaliation.agreescountervailing the Fifthly,a Western national
protective industries
and Fourthly, developingforced Industrialisation countries.
Substitution
imported
for This Thirdly,
(ISI)
received!"admitexcept have
indirectly the disease. comparative
trading imported
1. import often domestically increases beenembargowas Government
Kaight. it out Rumanian on
tomay believes countries the
in under
crack partner Burope security. barriers the Argentina, tariffscountries
of thatcountries through goods The
use
processed curtail
Retaliation
B.W. beef So,
levy ofdefense-oriented enjoy
its the condition defined advantage.
down a that the may are producedGovernment in of it are
Economic : domestically tariff has significant
and Defense are prices
industries tariffs oil imports extended fromprohibits may
deemed competitive Further,
Unitedthe used will
thtariff
e also to except as where
not also the conditions. levy
can on onUnited shift of to thathome. the continue
to
industries employed imported
goods,
while protect a
Principles also the impositionplayed set United
imported strategically it
by foot United
to importtariff protect
improper produced tariffs levels from in of on firstrefusing
For
be companies. pricing. the and
States well which a the to
in
employed developing infant instan
be whole For of onthe
Practical, as states ofare agricultural by goods. strategy refined mouth States products produce
meat it co to Statesexample, certain
has bythe aprotection. developed protecting
often It wants interest
labelling,sparkling retaliation the important, decreases industris ndition export
ce, if
allowed rules. are At of
disease
from other "Rumania once it
p.344. ifa the employed at
Argentina. commodities goods
industrialised,
In
viewed'as products economy to thathome, certain
thinksSouth that of
trading the countries those samefoster excluded consumers
France wines countries. its technique
other For such unemployment can had it until
United wine it
while thatKorea fecls
example, vital industries time,
existence by be bematerials did attacked
partner
against
goes'Champagne as to will Countries also
may they
International
isproducers words, many seen refined not beef the could
likelyStates. those finished to it Hungary mayunder in
creates levy let goods no
For they if both statetoprotect by from
it and
developing the her until cattle. placeendanger the longer have
to If example, is
think supporting
while and from tariffs after law
cconomy.
areinterests, goods. growth. will oils could
a Business
stop the for to done Import certain a or
certain allowsbeingmarket
it these Later, tariff
that very both not out are
its
U.S. too stop for on is be its
if

prohibitive wider
butcommodity. onMost tariff. On 1. international
Tariff 4.2.1 Finally,
manufacture
payment
balance levied
governments
of domesticintended. the
the leviedInstruments
prices
its Developed Thus,
developing Import
Tariff
Tariff 1.
at the the
Tariff Incidence On government's
original
cocoa Basis
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on of duty the This
of
and producers
raises
economieseconomies are reduced import Import of SpecificCompound Tariff trade. of
imported import of Irade
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Ad-valorem Calculation On
are such duty through such
Brazil often Tariff oneTariff
their commodity. type origin, Basis used foreign Control
duties Priortariff It deficit. is
dutyimported
rates. of of Tariff can of commodities.
of sometimessubsidies
commodities
to from
revenues.on makeconsidered trade Incidence,the the
like to is be raise so policy
its In on
economic restriction tariffs 3. classified
Chart earliest the as
coffee. United our weighted
almost Revenue
Tariff Govermment
Revenue to On commodities
use While revenue toand
Basis loss referred objectives.
For ofdiscussion, as can 4.1: ensure
all more an Protective
Tariff of and tobounties.
example,
On States it excise reforms be on
on Types because raise
imports. classified widely for
exportcalled is various tothe
Column
Tariff 4.
the their duties as A
do main compared Tari Single Systems
Tariff On of the
their as which
other
Ghana
traditional in
Tariffs
countervailing
degree This
tariff as Basis government of
compensatory
not
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of
imposes raise will levied
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ustry-oriented exportsexport on be many had Prohsb1t1ve
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on tariff Quanum Ou
duty
export imported on been when Basis to in by
in of to
tariffs,
to importtariffs tariff the and restricting
Chart protect when
addition their may
originally
it Tarnf Non of correct into
taritf get goods. imposingexported and is export home also
better tariff. exist levied 4.1. it 45
has the the to be
on but a is
commoditiesdomestic and Tariff valorem 3.tariff. measurement. ecould weightad-valorem
the Specific tariff 2.industry
economies 4.6
valorem machine J0$20 Butcollect
, specific theexample, to revenue A
consumers.
undercut, now 15% isThe thexample, and Onrevenues.
Tariff + custom compound
protective ($10 a sum is
levied specific
phrase basis the Tariff
may 10% compound costs a levy or
a of price basis
industries.either on and of + 'A fixedtariffofficials a from but as mcasurement a of tariff on(usually
10% $ 15% $l1,500 a adtariff a
nation
physical impose
Basis 30 tariffis ad percentage
Thisincrease $200 is ofBasis
whichtariff. specific 200) $would sum of also For valorem calculation
raise ofs tariff $20 on advalorem a
of getstariffcould fixed of labour
Revenueare
Accordingly,
of imported result of each valorem keeps price andexample,
unit import
Revenue tariff, 100) the a eroded compound Calculation
tariff.
not revenue of $20 oncombination on in fee
imported sum prices
increase a on levy can of intensive)
on in10% imported on tariff e of
Latin there
produced vehicle thJapan an tariffs
tariff whereas the ad each tariff value the cach a levied
vary
to to machine cach of artificially with imported
$20
collection valorem rises goods computer arc
Government the machine $15 imposes means tariff per or
isthe imported imported machine on on of protects of of inflation. according three
domestically, Government
generally tariffs European machine with $15000,
the
whileothcr
'A' value
'according on unil
and each specific a commodity. types
of by inflation. highautomobile. 15% using trade
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A' 'A
imported domestic and
imported. cach to or
imposed $200. customs now according
th e of
countries
specific means of 'A' for tariff pair mostly
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leviedclassified or United $200. would Japanese costs not to type
provide 'A' that an onvalue.
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of
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mainlyStates
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th e
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100 A in shoppers. imported. For
calculated
financial revenue of other type specific taxes
protect
their
rely use and the on of ofthe from to of of standard
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of on $sum price. being 10,000
of effectwhich
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ye the and For The on
ad ad ($ of of
ar a

all
possiblilityprohibitive
oftariff. treatment
Onpreference. to
5.imperial under or
ofuni-linear
goodsthe commodities
Suchregionalties. On 4.Here,Power their producers hand, Instrumnents
asgeneraly It
tUnder
he Partial 4.2.2
imposing world
amountstrade'offall andexchange the duties Tariff to may
prohibitive the Tariff
the
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hecompletely
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Samuelson, Equilibrium
such
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consumed a on in or intention from
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equilibrium ofBasis th e For
irrespective single of
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self-sufficient"on the or tariff due foreign
on division tariffs thus
quantum, example,
Ottawa prohibit or
tariffyields Control
P.A. account Prohibitive British preferencial
countries of is to
imports and of column of discontinued
analysis and that killing Quantum system,Tariffproducers. to
imposition
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analysis,
is Analysis particularly of puts
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markets of their
small
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ents India tariff, imposed the
except the System
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9h part of While society
be all gave country
used against a The of in
Edition,
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of raising
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change withwhen Tariff non-prohibitive the preferential those and into provide next
it inefficiently
utilised. be
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p.678 classified origin.offers capitalreduces rates
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in we a if twhich he related uni-linear country. budget.
has output
country the words India of quite
the are tariff protection
tariff This international treatment
providesuniform
While to these
weakpolicy
dealing efficiencies also to a th e substantial. Rates
inside of so is as
goods. has An
or
linkages ofproduction. tariff it
a raises that is prohibitive particularsuperior tariffs
instrumentsmall absolutely Samuelson, high received by for in of
preferential.
treatment
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to these
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trade certain
a off
consumption
international preferential industry.
small it is continuity.
competitive innot tariffs
domestic
other lowers but all true chokes
"A and known of to prices so the
is and racial
column
general
small inmports
not system British Cnder
all
industry.
parts of
high other are 4.7
nation non lead th e of
the kills the off as or
and
of
improvementwill net trade. affect 4.8
production. other,
imposition. of like. limits Tariff anation's
volume byUndernation) the
(3) (2) (1) protectionist a
Terns (5) (4) the effect
rise
3. On large the economy.
Kindleberger, attheproducersproduct
Redistribution
producers -Government.
imported.
in unitRevenue Pro£uction Consumption
giving
as tariff tariffs consumers
raising is the nor
the welfare
an of or While
he favour protective trade of nationworldgeneral
tterms
other important fall. the
cheaper The domnestic is
these in Therefore,
of protection reducesKindleberger device, decline rest
Effect: always
declines In the reduces prices,
Trade
of atdue is of various to hand,
choice two
C.P. trade known the Effect the change contrast nation's equilibrium of
rates. the to It effect the
Effect: Effeçt: ittool opposing in when tariff
Internation : Effect: cost producers. the is to
domestic effects production itproves by declines. but the the economy
of equal The due shifts
The the
of as the
Tariff : the forcing of the to terns volume it will
imposition Rise has global
reason
country redistribution
consumers.
domestic The imposition domestic to relative th e to terms this, volume trades.
framework,
al Tariff to are neither
Economics, the
whichconsumption. in
reduces and them be
allocation
forces of (because
Thistariff price
enlisted commercialpolicy.
the when
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trade
tariff domestic government double-edged affect
imposing
that redistributes
transfer
of producer. consequent following: rices to tradesuggests trade such
a
of the eighbt cut small increases industry
where
p. he
teffect. duty remain
but a the
107 demand
if the
consumnption
of of reducessiuation,
tariff taiff:brings à imports resources whether improves world
tariff.volume ofmultipliedprþduction kindsgoods nation a
Here, That revenue. the nation is
income part weapon. unchanged. small).prices
in benefits upon Though nation's
twhich
he is of imposes nation's the International
Business
of the of why,
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importing trade from
consumer competing the effects well
Further, of
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high by in is nation's nation's large
gets revenue itimposition goodstheythe On it
and the
consumers theincreased. is as one one is So, welfare. a welfare,
factors tariff, enough
the domestic price number also of the use primarily the welfare terms of of
improves a hand,
imports
country surplus goods, small tariff a small
of to called tariff effect to the The
the the of to
the to of of it
ofthe

Instruments of
measureof CVDDuties
subsidy.Countervailing
accurate 4.2.3 (7) (6)
closures
subsidised
an producers of to Tariffsexports
these (8)
Countervailing
neutralise
tigation import imposed place with subsidy
unfair the level are given Balance
import employment
opportunities. it it people and Income competition
industry
Competitive price. wil price is
to the goods are may also
subsidy the Subsidy' amount But, punitive of The Control
Trade
duties establish and protectionism. hence imposition
elastic,
byglobaltradeimports playing
of in levied plus normal lead on result of
the and of Effect: with change
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exerts problem actions Payment to giving
importing practice, rules
they same on of improve domestic all Effect: in
negative
findsimposedduties
the exporting amount volume misallocation will
However, The
can fieldimported subsidy its excess
in
receive goods,
that circumstances of huge have product in undertaken
raise imposition monopolistic evils relative
(CVDs), between domestic is The balance
and Effect The supply
effects
a under nation.
trade the job
that of only fo r
World severe from a country. provided expected amount
national but and
foreign between
nationshas losses. who goods value an imposition prices tariff
penalising : money of may
World also their
domestic of The economy inefficiencies. of of
of Trade effect can market. resources exportable
under Countervailing to of
by payments of result tariff advantage changes reduces
country
subsidies. known As and importing income
afford offset loss duty exports.
imposition income
Trade Organisationexport government. onproducers
which the
nation that operating inwill of
domestic is in the
as tosubsidies overall kept of the and increased restrict
as tariff
to he
tgoods
bsidises
Organization subsidies sell can nations demand
anti-subsidy
These countervailing needs the the terms
equivalent ofthereby
country. well
itDuties
of be tarifftariff under eliminates
protected causi
(WTO) industry, If at specific
generated domestic th e
are procedures
detailed in left product a a made to as as of for
its are lower a condition spending trade. ng
unchecked, (CVD) timely levying may inflation.
employment imports.
imposed
exports, considered to counter
to a
(WTO)duties, domestic tall
forcing price producers impacts
- the cut spending foreign
duties which and are assess due country, of in 1.9
amountaction
to down Thus, of the its It
njuring afterrules are factory because foreignmeant full
can deals to such that the the
trade be of
an to be
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ontained Thematerlal injury.industry.
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rules agreement levy
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for of that the when for in
conducted only any funds funds qucstion countervailing PodUrr
whether
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foregn
made of are can Agreement
and the in that
can Artiledutes, rules
years.
implementation contains permits form the of ot
duties
(for (such 'subsidy'hurting the of take Gencral how Commercc the
by amount there are rule a
these of nation production may countries provded n
calculating example, as a subsidy, t0
export The domestically \ cOun
countervailing
detailed
anincome government on being
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or or subsidiesthe subsidised subsidise the soch
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duration
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amount for duties can onand goods to asscSsedol th e ountv
support. government is that toand, ts
determining quite
infusion counterviling Countervailing
of be
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to for the the products,
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domesticAgreement dutes oWn
countervailing
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of
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hasindustries
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determines institutional
significant on in Intenafonal
Buness
domestic
subsidized after duties Measures, domestic
including These represent or Border much. ACCOrdance
Subsidies to
the potential (GATT) unions andWorld
duties, a any procedure on the are
criterla
productimporting such subsidised measures is Protection If in decide
industry exports. financial measures which causing industry, there whether impacts processdanger
a at
within tade
which direct
asdirect 1994, least Trade
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4.2.4
4.3 countries
them.
one of
whenall trade inverse
partner welfare Prom the then rate, maximises ofof In
extent. one price
benefits from or intensity
Awelfare in trade thetariff As Imstruments
Quantitative the of Apart Eventually, imposeHence, net tarijf ts we
nation trade" trade the factor
Non-tariff
barriersgoods
or decreases its words durlng l
asocial terms nation's onhave
NON-TARIPF
BARRIBRS
from further, an itsfaces of bythe welfare against To to
points deteriorates
is(overall)
of itsOptimum Tariff
vlewpoint said of
freely optimum overall imposingthe is stateit the to the those of terms
importable studied Irade
tariffs, all a
ofprotection
exceed welfare to trade
Restrictions), lower terms pushed as net consumers of
in followed
nations increases, thDominick
e be two
welfare the
differently, benefit view, optimum increases,
the other impose negative th e of
welfare tradeof in Control
increases the
tariff volume of
tarif, of back tariff opposing
global end trade the lophase.
ss
which the comnmodi ty ,
previous
trade byof resulting
Salvatore, atcountry. of
improves,
restrictions optimum up declines. the resttowards rate but effect
a its of of uptounder from The the is when decreases the the
market
Voluntary restrictions
neither
later
losingseries own. trade welfare the of raised is forces. nation'nation.
s sections
In tariff the the resulting
afree Optimum from optimum the in its Onthe
tariffs, of
This maximum stage other rate or
affecting all retaliation, and of autarky
world above the
other high quantum/volume On
Exportinclude retaliation or imposing its trade, remains
welfare. the one that
also most wil also trading from tariff are maximises
nor
words,
economic as that when improvement Tariff" factor hand, when
RestraintsImport the exist, detinitely a the point (i.e., enough low. other
ofdeterioratingthis the is uncharged Now, this
toone this the a
gainswhich the by partner large optimum
large with nation
till is A hand, large
welfaregains trading reduction the the to
tariff fall
Quotas the that ideal whether of
reduce nation. nation optimum a inratemaximum make domestic its
(VER) from limit trading falls,
prohibitive point. increases the makes is nation
will
from partner rate depends the thein trade
(also nation'in s of justified
up improvement the
and trade. the the terms Theincreases as the tariff gains for is net imposes
falltrade. it Eventually, tariff) the
volume falls
referredmovement partners. volume of faces its possible income nation'
on s
Technical Some for wil trading tariff. volume termswhich fromhigher if 4.11
trade. and tariff the best the ofbut a
eachThus, also the its
as of of
India 5. 4. are I,
consumptiop.
countryfor an Apartfrom exporter in strenghteningOriginally
hedgingandfurther
'import Sub-section Export subject the
foundagriculture
Substituting Dations clear.
and Quantitycommodity
has
amountdemand
produced
of Import
quota to supplying
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