TARIFF REFORM AND THE UNIFORM TARIFF

Abstract

The optimal design of tariff policies is considered in a simple general-equilibrium model that reflects many of the real-world constraints placed on tariff design and reform. Sufficient conditions for an uniform tariff structure to be optimal are deduced, these involve quasi-separability of the trade-expenditure function. A number of partial tariff-reform measures are considered. Determining the appropriate direction that tariff reform should take depends critically upon the marginal effect raising or lowering a tariff has on the production of importables and exportables.