Quantitative Models of Commercial Policy

What tari¤s would countries impose if they did not have to fear any retaliation? What would occur if there was a complete breakdown of trade policy cooperation? What would be the outcome if countries engaged in fully e ¢ cient trade negotiations? And what would happen to trade policy cooperation if the world trading system had a di¤erent institutional design? While such questions feature prominently in the theoretical trade policy literature, they have proven di ¢ cult to address empirically, because they refer to what-if scenarios for which direct empirical counterparts are hard to \u85nd. In this chapter, I introduce research which suggests to overcome this di ¢ culty by applying quantitative models of commercial policy