Acknowledgments xi List of Tables xv List of Figures xvii Preface xxi Part One Trade Theory as Guidance to Trade Policy 1 1 Preliminaries: Trade Theory 3 1.1 What Are the Core Questions Asked by International Trade Economists? 3 1.2 How Can Trade Theory Provide Guidance to Trade Policy? 4 1.3 How Has International Trade Evolved over Time in Practice? 5 1.4 How Has Trade Theory Evolved over Time? 6 1.5 How Is the Book Organized? 9 Further Reading 11 2 Inter-industry Trade 13 2.1 What Are the Effects of Trade in the Long Run, When Countries Differ in Technologies? 14 2.2 What Are the Effects of Trade in the Long Run, When Countries Differ in Endowments? 24 2.3 What Are the Effects of Trade in the Short Run, When Countries Differ in Immobile Endowments? 39 2.4 Summary Remarks 51 Applied Problems 54 Further Reading 55 3 Intra-Industry and Intra-Firm Trade 57 3.1 What Is Intra-Industry Trade and Its Effects? 58 3.2 What Is Intra-Firm Trade and Its Effects? 65 3.3 Summary Remarks 71 Applied Problems 74 Further Reading 76 Notes 78 Part Two Trade Policies and Their Effects 81 4 Preliminaries: Trade Policy and Welfare Considerations 83 4.1 What Are Traditional Trade Policies? 83 4.2 What Approaches Are Used to Examine Trade Policy? 84 4.3 What Are the Welfare Effects of Liberalizing Trade Policy? 85 4.4 How Is Part Two Organized? 88 Further Reading 89 Note 90 5 Tariffs 91 5.1 What Are Tariffs, Their Types and Purpose? 91 5.2 What Are the Effects of Tariffs? 92 5.3 What Are the Effects of Tariff Liberalization? 107 5.4 How Protective Are Tariffs of the Domestic Industry? 109 5.5 Summary Remarks 111 Applied Problems 115 Further Reading 116 Notes 117 6 Export Subsidies 119 6.1 What Are Export Subsidies, Their Types and Purpose? 119 6.2 What Are the Effects of Export Subsidies? 120 6.3 What Are the Effects of Liberalizing Export Subsidies? 137 6.4 Summary Remarks 138 Applied Problems 142 Further Reading 143 Note 143 7 Quantitative Restrictions 145 7.1 What Are Quantitative Restrictions, Their Types and Purpose? 145 7.2 What Are the Effects of Quantitative Restrictions? 147 7.3 Summary Remarks 157 Applied Problems 160 Further Reading 160 8 Policy Comparisons 163 8.1 What Are Policy Equivalents, and Their Purpose? 163 8.2 What Are the Relative Effects of Policy Equivalents? 164 8.3 What Are the Relative Effects of Liberalizing Policies? 172 8.4 What Are the Effects of Substituting Policies? 174 8.5 Summary Remarks 176 Applied Problems 180 Further Reading 182 Note 182 Part Three Trade-Related Policies 183 9 Preliminaries: Trade-Related Policies and Trade in Services 185 9.1 What Are Trade-Related Policies? 185 9.2 How Have Trade-Related Policies Evolved over Time in Practice? 186 9.3 How Have Trade Policies Toward Services Evolved over Time in Practice? 188 9.4 How Is Part Three Organized? 190 Further Reading 191 Notes 192 10 Intellectual Property Rights 193 10.1 What Are Intellectual Property Rights, Their Types, and Purpose? 193 10.2 What Are the Effects of Intellectual Property Rights? 196 10.3 How Have Intellectual Property Rights Evolved over Time in Practice? 202 10.4 What Are the Intellectual Property Rights Issues on the Policy Frontier? 206 10.5 Summary Remarks 208 Applied Problems 211 Further Reading 212 Notes 214 11 Environmental Policies 215 11.1 What Are Trade-Related Environmental Policies, Their Types and Purpose? 215 11.2 What Are the Effects of Trade Policy on the Environment? 216 11.3 What Are the Effects of Environmental Policy on Trade? 219 11.4 What Are the Implications of Using Trade Policy to Address Environmental Externalities? 221 11.5 Summary Remarks 232 Applied Problems 235 Further Reading 237 Notes 238 12 Labor Policies 239 12.1 What Are Trade-Related Labor Policies, Their Types, and Purpose? 239 12.2 What Are the Effects of Trade Policy on Labor? 241 12.3 How Can the Gains and Losses from Trade Be Redistributed within Countries? 264 12.4 What Are the Effects of Labor Policy on Trade? 265 12.5 Summary Remarks 267 Applied Problems 270 Further Reading 271 Notes 272 13 Growth and Development Policies 273 13.1 What Are Trade-Related Development and Growth Policies, Their Types, and Purpose? 273 13.2 What Are the Effects of Trade on Development and Growth? 275 13.3 What Are the Effects of Growth on Development (or Welfare) in the Presence of Trade? 287 13.4 Summary Remarks 295 Applied Problems 298 Further Reading 299 Notes 301 Part Four Trade Arrangements 303 14 Regional and Multilateral Arrangements 305 14.1 What Are the Institutional Arrangements for Trade Policy? 306 14.2 What Are the Effects of Alterative Arrangements for Trade Policy? 310 14.3 Are Regional Arrangements Stepping Stones or Stumbling Blocks to Multilateral Liberalization? 321 14.4 Summary Remarks 323 Applied Problems 327 Further Reading 329 Notes 331 References 333 Index 339

In Global Trade Policy, economist Pamela J. Smith explores the key questions raised about global trade and policy today —and the answers that emerge from economic research. During the past two decades, the character of global trade and policy has changed in unprecedented ways. Attention has turned from traditional trade policies —such as tariffs, quantitative restrictions, and export subsidies —to trade related policies including intellectual property rights, labor policies, environmental policies, and growth and development policies. The institutional arrangements for these policies continue to evolve with substantial international debate. Offering accessible coverage for students of economics, business, public policy, and applied economics, this book provides an economic framework for understanding the current policy debates in global trade. Readers are first given background knowledge of trade theory to help guide discussions of trade policy, including traditional theories of inter industry trade, as well as newer theories of intra industry and intra firm trade. They then examine the national and global effects of widely used policies designed to directly affect trade, the indirect impacts of newer trade related policies, and the institutional arrangements for these policies. The distinctive question based format provides an accessible structure for students to grasp the key issues in this field, and the inclusion of reading lists and applied exercises enable them to explore open ended and realistic questions of policy debate.

"Unique for its strong focus on important policy questions in international trade and development economics. It provides comprehensive analysis of issues that generally do not appear in an introductory international economics text, including trade policy equivalence, intellectual property rights, and international trade and its impacts on labor markets and the environment."  —Keith E. Maskus, University of Colorado at Boulder "This is an excellent and comprehensive treatment of the theory of international trade, trade policies, and institutional issues."  Robert M. Stern, Goldman School, University of California Berkeley "Strong and subtle symmetry is a very attractive strength of this insightful treatment of modern policy interventions in globalized markets.  Its structure is assiduously integrative, almost poetic in its analytics.  Its applied questions encourage readers into the adventure of seasoned policy evaluation.  It is a mature mentor -- more-than-primer -- for both activists and analysts, who need to go beyond the elementary anatomy of policy prescription for a global economy."  —J. David Richardson, Syracuse University and Peterson Institute for International Economics “Pamela Smith fills a long-standing gap for students and policymakers wanting to understand contemporary trade issues like services, labor, and intellectual property rights, while remaining grounded in rigorous economics.” —Michael J. Ferrantino