Learning by doing, precommitment and infant-industry promotion

We examine the implications for strategic trade policy of different assumpt ions about precommitment in a two-period Cournot oligopoly game with learni ng by doing. The inability of firms and governments to precommit to future actions encourages strategic behaviour which justifies an optimal first-per iod export tax relative to the profit-shifting benchmark of an export subsi dy. In the linear case the optimal subsidy is increasing in the rate of lea rning with government precommitment but decreasing in it without, in appare nt contradiction to the infant-industry argument. Extensions to active fore ign policy, distortionary taxation and Bertrand competition are also consid ered.