Trade Liberalization and Trade Adjustment Assistance

33 Pages Posted: 14 Aug 2007

See all articles by K. C. Fung

K. C. Fung

University of California, Santa Cruz - Department of Economics

Robert W. Staiger

Stanford University; University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 1994

Abstract

We explore the relationship between trade adjustment subsidies and successful reciprocal trade liberalization. We consider economies that are faced with a periodic need to move resources out of a declining import-competing sector, and that are attempting to sustain cooperative but self-enforcing trade agreements in the face of these adjustment needs. If the limitations associated with enforcement of international trade agreements are sufficiently severe, trade adjustment assistance can facilitate reciprocal trade liberalization. We argue that this suggests a possible efficiency rationale for adjustment policies that treat resources differently when traded sectors are involved.

Suggested Citation

Fung, K. C. and Staiger, Robert W., Trade Liberalization and Trade Adjustment Assistance (September 1994). NBER Working Paper No. w4847, Available at SSRN: https://ssrn.com/abstract=481489

K. C. Fung (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5077 (Fax)

HOME PAGE: http://econ.ucsc.edu/Faculty/facFung.shtml

Robert W. Staiger

Stanford University ( email )

Stanford, CA 94305
United States

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-2265 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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