Question
Consider the following information country Production cost( $ per unit) in Bangladesh Bangladesh(Home country) 80 India (Partner country) 60 Vietnam(Rest of the world) 50 Question:
Consider the following information country Production cost( $ per unit) in Bangladesh Bangladesh(Home country) 80 India (Partner country) 60 Vietnam(Rest of the world) 50 Question: 1)Initially ,Bangladesh imposes 100% tariff rate on on its import and forms an FTA with India.Find the trade creation / trade diversion effects of this FTA. 2) Now if Bangladesh imposes 50% tariff rate on its import and forms an FTA with India.Find the trade creation/ trade diversion effects of this FTA. 3) With 50% tariff rate on its import if Bangladesh forms an FTA with Vietnam.what will be the trade creation/ trade diversion effects of this FTA. 4) Compare all of the above situation.
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