Working Paper: CEPR ID: DP679
Authors: L. Alan Winters
Abstract: This paper constructs a simulation model of the EC footwear market with which to consider the effects of EC trade policies. It examines the Southern enlargement of the EC, the quotas imposed on Korean and Taiwanese sales - initially in France and Italy and subsequently, in line with the `1992' programme, EC-wide - and the liberalization of imports from Eastern Europe. Import restrictions are shown to be costly - especially those against Eastern Europe.
Keywords: integration; trade policy; 1992; footwear
JEL Codes: F13; F14; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Removal of tariffs on footwear trade between Spain and the rest of the EC (F15) | Increased consumption of footwear in the EC9 (L67) |
| Removal of tariffs on footwear trade between Spain and the rest of the EC (F15) | Decreased intrabloc sales (L14) |
| Removal of tariffs on footwear trade between Spain and the rest of the EC (F15) | Significant element of trade diversion as ECS supplies displaced efficient developing-country producers (F14) |
| Imposition of national quantitative limits on imports from Taiwan and Korea in 1988 (F14) | Reduced consumer welfare throughout the community by ECU 384 million (D69) |
| Imposition of national quantitative limits on imports from Taiwan and Korea in 1988 (F14) | Increased quota rents for these countries (F29) |
| Liberalization of imports from Eastern Europe (F15) | Substantial trade creation (F14) |
| Liberalization of imports from Eastern Europe (F15) | Boost Eastern European export earnings significantly (F10) |
| Liberalization of imports from Eastern Europe (F15) | Increased competitive pressure on Italian producers (L11) |