FOREIGN TRADE REGULATION IN THE ECONOMY OF SMALL AND BIG COUNTRIES

Анотація

Size of economy is a factor of international trade regulation. We systematize the effects described in existing research works. Size of economy influences export and import priorities of foreign trade policy, efficiency of tariff regulation or tariff liberalization, sophistication of customs procedures, indirect tax rates for imports, prevalence of subsidies and trade remedies, importance of foreign trade taxes for the government revenues, opportunities and stimuli for trade disputes and wars. It is more difficult for small countries to carry out import substitution policy. In small countries tariff regulation is less efficient, considering the absence of the terms of trade effect and market competition deterioration. But under larger trade openness customs tariffs are more important for the state budget of small countries. Non-tariff regulation is more sophisticated in large countries. The balance of economic stimuli and opportunities in trade wars and disputes is not favorable for middle-sized economies. We extrapolate the abovementioned effects to Ukraine as a middle-sized economy. This allows us to provide recommendations for its foreign trade policy: differentiated trade liberalization, dependence of the optimal foreign trade taxation level on trade openness and trade balance, collective trade sanctions.

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