WELFARE COSTS OF UNITED-STATES QUOTAS IN TEXTILES, STEEL AND AUTOS

This paper quantifies the welfare effects and resource shifts that would occur if US quantitative restrictions (QRs) in textiles, steel and autos were removed. Estimates are derived from a static ten-sector general equilibrium model of the US economy. The welfare loss from the QRs is estimated at approximately US$20 billion (1984 dollars). Due to the high rent transfer component of QRs (about 75%), the average across-the-board tariff equivalent of QRs (in terms of welfare costs) is estimated at about 20%, a rate which predates the early days of multilateral tariff reduction. -Authors