GDL

Journal from gdlhub / 2017-08-14 11:52:53
Oleh : Olivier Cadot, Jaime de Melo, Marcelo Olarreaga, STIKOM Dinamika Bangsa Jambi (molarreaga@worldbank.org (M. Olarreaga).)
Dibuat : 2010-08-25, dengan 1 file

Keyword : protectionist, duty, drawbacks, evidenc,Mercosur

In a political-economy setting where tariffs and duty drawbacks are endogenously chosen


through industry lobbying, it is shown that full duty-drawbacks are granted to exporters who


use imported intermediates in their production. This in turn decreases their incentives to


counter-lobby against high tariffs on their inputs. In equilibrium, higher tariffs will be


observed on these goods. The creation of a regional block will change the political


equilibrium. Duty-drawbacks will be eliminated on intra-regional exports, which in turn will


lead to lower tariffs for goods used as inputs by intra-regional exporters. Evidence from


Mercosur suggests that the elimination of duty-drawbacks for intra-regional exports led to


increased counter-lobbying by users of intermediate products. In its absence the common


external tariff would have been on average 3.5 percentage points (25 percent) higher.

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