Economic- trade

Cerrado

(i) You should show the impact of export subsidy (in a graph)

(a) when EU is a small exporter of the product; and

(b) when EU is a large exporter of the product.

(ii) You should focus on the impact of export subsidy on EU product -

where you should show and explain (graphically)

- the impact of export subsidy on EU producers, EU consumers, and the EU price of that product,

- impact on EU tax payers, EU administration and

- also impact on non-EU prices and production.

(iii) You should graphically show and explain the economic effect of export subsidy on non-EU importer's.

(a) In this situation, will non-EU producers impose tariff restrictions and retaliate?

(b) You may then want to see what if non-EU governments impose an equal amount of import tariff (which is equivalent to the export subsidy given by EU administration). For example, if EU gives 10% subsidy and the importing country impose same 10% tariff restriction on EU product, what will be the impact on non-EU price and production.

(iv) You should show the welfare effect of export subsidy, too.

Habilidades: Diagramas de flujo, Redacción de investigaciones

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