Abstract:
This paper explores the consequences of discriminatory trade liberalization in the presence of quota-protected single-firm industries. In recent years, trade liberalization among developing nations increasingly has occurred outside of the multi-lateral, GATT-based, negotiating rounds. Instead we have discriminatory “mini-lateral” arrangements like NAFTA, MERCOSUR, the Andean Pact, or ASEAN. At the same time, protection often takes the form of quantitative restraints and other non-tariff barriers. Lastly, the single-firm industry is a common occurrence in developing economies both currently and historically.