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Trade Liberation And Trade Adjustment Assistance

Author

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  • Fung, K.C.
  • Staiger, Robert W.

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. & Staiger, Robert W., 1994. "Trade Liberation And Trade Adjustment Assistance," SSRI Workshop Series 292707, University of Wisconsin-Madison, Social Systems Research Institute.
    • Handle: RePEc:ags:uwssri:292707
    DOI: 10.22004/ag.econ.292707
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