Economic- trade

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$10-30 CAD

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(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.

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