We study the optimal trade policy against a foreign oligopoly withendogenous quality. We show that, under the Most … low-quality product and a tax onhigh-quality one. Another example of such a nonuniform tariff policyis a Regional Trade … Agreement (RTA). We show that, if a welfareimprovement is possible through a RTA, it is always with the low-quality producing …

of R&D costs of quality development and the foreign country is relatively larger andendowed with a relatively higher … good of higher quality thanthe domestic firm. This equilibrium is characterized by unilateral dumping by the foreignfirm … to a quality reversalin the international market, which gives a rationale for the domestic government to enact ADlaw. We …