Abstract

This paper examines the effect of the reduction of an import tariff on the Japanese fishery industry by using a computable general equilibrium model. Being against our common knowledge, our simulations with very realistic conditions show that both of the domestic consumers and the domestic fishery industry can gain by the subsidy (a negative tariff rate) policy, and also that income of the fishery industry would increase by trade liberalization when all possible linkages of economic activities are taken into account within a general equilibrium framework. Our results suggest a possible situation that there is no political conflict between the domestic fishery industry and the domestic consumer.