ABSTRACT
International trade policy is the more effective, the better it fits the industrial structure of the trading countries, for trade can never be independent of production. Export concentration was relatively more marked in France than in the UK in rubber manufacture, construction and distribution. Research intensity implies high overhead costs which have to be recouped during the market life of the product. As manufacturing became more science based, ways were sought of spreading the cost. The threat of entry could be reinforced by the threat of the importer's government to impose tariffs or other import controls, but as long as the importer also provides the sales outlets, this threat is not necessary. Quality competition implies rules of price formation in ways which differ from those to be expected under quantitative competition. The following does not try to establish any hard and fast rules of pricing under quality competition.
