Question 2 - Tariff and the impact of ICT

Read the two following reports:

- How an Information Technology Agreement 3.0 Would Bolster Global Economic Growth and Opportunity

https://itif.org/publications/2021/09/16/how-an-information-technology-agreement-3-0-would-bolster-global-economic-growth-and-opportunity/

- 20Years of the Information Technology Agreement

https://www.wto.org/english/res_e/booksp_e/ita20years_2017_full_e.pdf

a. Choose one country out of Brazil, India, Philippines and Vietnam. Summarize the key findings of impact of the agreement on your chosen country based on the provided readings (other sources are also encouraged).

b. Assume the market is competitive, briefly explain the possible impact of the elimination of tariff on the new proposed version Information Technology Agreement on each country in your assigned group in question 1 (i.e. either A or B or C or D).

You are expected to draw the domestic supply, domestic demand of the countries, the pre-agreement and post agreement situation. What are the theoretical welfare implications of the tariff for producers, consumers in this sector and government? Discuss by using your graph as a basis.

c. What are the possible impacts of such agreement on the offshoring activities in each country in your group ? According to Feenstra - Hanson model, what might happen to the income inequality in the countries?

d. Compare and contrast between the Feenstra Hanson model and the Hecksher -Ohlin model in their impacts on income inequality.