Welfare Effects of VERs Versus Quotas Versus Free Trade
Small Country Case

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Net Gains from Trade

Importing Country

Foreign Exporters

World as a Whole

With free trade

c+(b+d)+h

zero

c+(b+d)+h

Import quota

c+h

zero

c+h

With VER

h

c

c+h

VER vs. free trade

-c-(b+d)

c

-(b+d)

VER vs. quota

-c

c

zero