Optimal tariffs and the choice of technology Discriminatory tariffs vs. the ‘Most Favored Nation’ clause
比较歧视性关税与最惠国待遇条款下最优关税对出口国技术选择的影响,发现最惠国条款促使出口国选择更低边际成本的技术,从而提升进口国长期福利,但进口国在事后更偏好歧视性关税,凸显最惠国条款作为解决时间不一致问题的承诺机制。
We compare the effects of optimal tariffs on the technology choice of exporters under the discriminatory tariffs regime and the "Most Favored Nation (MFN)" clause. It is shown that a lower marginal cost (MC) technology will be chosen in equilibrium under the "MFN" clause. As a result, importing country's long-run welfare increases with the adoption of "MFN" while exporting countries welfare decreases in most cases. However expost technology choice, the importing country prefers discriminatory tariffs. This result, therefore, highlights the role of "MFN" as a commitment mechanism to resolve a time-inconsistency problem facing the importing country.