ABSTRACT
This chapter explores the comparison of the final price and output effects of the VRAs across firms and size classes and then derives some general conclusions about the effects of the trade restraints and fuel economy regulations on the domestic auto industry. It analyses the Transplant production in the US and the long-run implications of expected rapid growth in transplant output and considers the effects of market structure and non-competitive behavior on the competitiveness of the domestic industry and the possible impacts of alternative trade policies on these problems. The VRAs increased both the price and output levels of domestic producers in the small and intermediate segments of the US auto market. The output effects estimated here are somewhat larger than those estimated in other studies of the VRAs, and generally exceeded the price effects for most producers. A significant number of job opportunities were preserved in the domestic auto industry by the VRAs during the 1981– 1986 period.
