Should tariff reductions be announced? An intertemporal computable generalequilibrium analysis

In this paper the macro and structural implications of three alternative ta riff-reduction strategies are examined. Under the first strategy, which is similar to that adopted in Australia in 1973, the tariff cut is implemented without warning. The second strategy is consistent with the current approa ch of phasing in tariff cuts according to a previously announced schedule. Under the third strategy the tariff cut is implemented several years after it is announced. Our results suggest that if tariffs are to be reduced then it is preferable to implement the policy without warning.