This paper develops a simple small-country model to explain why the WTO prohibits export subsidies but allows import tariffs. Governments choose protection rates import tariffs/export subsidies) to maximize a weighted sum of social welfare and lobbying contributions. While transportation costs...

According to the Uruguay Round Agreement on Agriculture (URAA), all agricultural non-tariff trade barriers should be converted into equivalent tariffs and further, reduced over time. However each member country has the authority to choose the tariff types when it converts NTBs to tariffs such as...