Potential Pareto-improving Move towards Most Favored Nation Tariffs

We use a multi-country asymmetric oligopolistic framework for segmented markets to study the welfare effects of reducing tariff discriminations - which we call a move towards Most Favored Nation tariffs. Both unilateral and multilateral reforms are considered. We investigate this issue under different scenarios such as when initial tariffs are arbitrary and when they are optimal. Conditions under which such harmonizations are potentially Paretoimproving are derived. We also analyze the effects on individual countries.