Should Tariff Reductions be Announced?

Abstract

In this chapter we use ORANI-INT to examine three different approaches to reducing tariffs that have, in recent history, been adopted in Australia. Under the first approach, which is similar to that adopted in Australia in 1973, the tariff cut is implemented without warning. The second approach is consistent with that adopted in the mid 1980s of phasing reforms in gradually and on giving industries several years advance notice of planned reductions in protection. Under the third approach the tariff cut is implemented several years after it is announced. This approach to reducing tariffs was adopted by the Australian government in its recent policy on protection to the passenger motor vehicle industry.

1 Anabridgedversion of this chapterentitled“Should Tariff Reductions be Announced? An lntertemporal Computable General Equilibrium Analysis” appears in The Economic Record, volume74, number225,June 1998.