TY - BOOK ID - 133492807 TI - Trade Policy Implications of a Changing World: Tariffs and Import Market Power AU - Jakubik, Adam. AU - Keck, Alexander. AU - Piermartini, Roberta. PY - 2023 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Taxation KW - Exports and Imports KW - Neoclassical Models of Trade KW - Trade Policy KW - International Trade Organizations KW - International Agreements and Observance KW - International Organizations KW - Trade: General KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Public finance & taxation KW - International economics KW - Tariffs KW - Taxes KW - Imports KW - International trade KW - Trade policy KW - Trade agreements KW - Currency crises KW - Informal sector KW - Economics KW - Tariff KW - Commercial policy KW - Commercial treaties KW - Uruguay UR - https://www.unicat.be/uniCat?func=search&query=sysid:133492807 AB - Economic theory suggests that countries’ tariff commitments in trade agreements reflect their import market power at the time of negotiations. However, as countries grow, their market power in different sectors can change in unforeseen ways and their commitments may no longer reflect changed economic conditions. Using a newly built dataset of pre-Uruguay Round applied tariffs and relying on the theoretical framework of the terms-of-trade motive for trade agreements, we estimate hypothetical tariff commitments under current levels of market power and compare them with actual tariff commitments. We find that lower tariff commitments required to reflect current economic conditions would amount to a reduction in annual tariff costs of up to $26.4 billion – equivalent to nearly 10% of global tariff costs. Our results reveal substantial heterogeneity between countries and sectors. The sectors with the largest potential tariff cost reductions are vehicles (HS 87) and machinery and appliances (HS 84-85). Product-level tariff reductions would range from 0 to 18.5 percentage points and are on average largest for China. In the past, the GATT/WTO system has updated tariff commitments through periodic rounds of negotiations, and our findings support the revival of the WTO's negotiation function in this area. ER -