Multilateral policy reforms and quantity restrictions on trade

We specify a many-nation, many-commodity model of international trade invol ving tariff and quota distortions. We derive conditions for the existence o f strict Pareto improving multilateral reforms of quotas, and obtain recomm endations for specific directions of such quota reforms. Given a mild rank condition on the world trade matrix, all directions of quota reform that at tain a strict Pareto improvement using international lump sum compensation remain strict Pareto improving even without lump sum compensation, provided that the quota reform is accompanied by a multilateral reform of tariffs. The precise nature of the tariff reform that accomplishes the redistributio n task is determined. (C) 1000 Elsevier Science B.V. All rights reserved.