We study a multi-country trade model with two types of countries (big and small ones). The model generalizes the case of two countries analyzed in [Bykadorov I., Molchanov P., Kokovin S. (2015), “Elusive Pro-competitive Effects and Harm from Gradual Trade Liberalization, “Preprint 295,...

In the standard Krugman (1979) non-CES trade model, several asymmetric countries typically lose from increasing trade costs. However, all countries transiently benefit from such increase at the moment of closing trade, under almost-prohibitive trade costs (i.e., near autarky, which is possible...