Does Import Protection Discourage Exports?
IMF Working Papers, January 1, 2006
Source details
- Canonical URL
- Does Import Protection Discourage Exports?
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Bibliographic details
- Authors: Stephen Tokarick
- Published: January 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451862805.001
Summary
- The paper argues that many developing countries seeking to increase export earnings have not fully recognized that their own pattern of import protection hurts their export performance.
- It quantifies how import protection functions as a tax on a country's export sector.
- It illustrates effects of various tariff-cutting scenarios in the Doha Round on export incentives.
Main findings
- For many developing countries, the magnitude of the implicit tax from import protection is substantial—about 12 percent, on average, for the countries studied.
- Reducing a country's own import tariffs can, in general, increase its export earnings.
- Tariff-cutting schemes that exempt certain sectors could be harmful to export incentives.
Analysis of tariff-cutting scenarios (Doha Round examples)
- The paper models various tariff-cutting scenarios and assesses their impact on export incentives.
- Results indicate that broad-based tariff reductions tend to improve export incentives, while selective exemptions may create anti-export biases.
Policy recommendations
- Developing countries could increase export earnings by reducing their own import tariffs.
- Careful design of tariff reductions is essential: avoid tariff-cutting schemes that exempt certain sectors, as these can be harmful to export performance.
Key statistics and publication identifiers
- Implicit tax on exporters: about 12 percent, on average, for the countries studied.
- Pages: 27
- Series: Working Paper No. 2006/020
- Issue: 020
- Volume: 2006
- DOI: https://doi.org/10.5089/9781451862805.001
- ISBN: 9781451862805
- ISSN: 1018-5941
Source: Stephen Tokarick, "Does Import Protection Discourage Exports?", IMF Working Papers 2006, 020.