Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198213 
Year of Publication: 
2012
Citation: 
[Journal:] CES Working Papers [ISSN:] 2067-7693 [Volume:] 4 [Issue:] 4 [Publisher:] Alexandru Ioan Cuza University of Iasi, Centre for European Studies [Place:] Iasi [Year:] 2012 [Pages:] 736-746
Publisher: 
Alexandru Ioan Cuza University of Iasi, Centre for European Studies, Iasi
Abstract: 
This paper provides a critical analysis of the strategic trade policy, in terms of limitations and difficulties involved in its implementation. Even there are many arguments used by its supporters for justifying the importance of this type of measures, it is impossible for the state to formulate useful interventionist policies, given the empirical difficulties involved in modeling markets with imperfect competition. Also, any potential gain created by government intervention can dissipate through the entry of new firms, stimulated by the possibility of such profits, while the need of a general equilibrium increases the difficulty of interventionist process. There are also some risks induced by using strategic trade policy, the risk of retaliation and a trade war with the country affected by the measure and the diversion of government intervention by certain interests, transforming it into an inefficient income redistribution national program.
Subjects: 
strategic trade policy
free trade
retaliation
trade war
general equilibrium
interest groups Romania
JEL: 
E20
E40
E58
E60
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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