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Abstract
Appropriate assessment of the social value of market access is at the core of a broad
range of inquiries in trade research. A selection include: the appraisal of industry-level production
and consumption distortions due to selective trade liberalization and partial tax reform;
the construction of national-level quantity indicators of market access consistent with welfare
change, and the use of international trade re-balancing as sanctions to discourage trade agreement
violations, or as compensation in trade dispute settlement. In order to obtain shadow
prices, we propose a new approach integrating the Luenberger benet function and the directional
output distance function. This yields a trade benet function which represents trade
preferences a la Meade in the context of a canonical general equilibrium model of trade. We
rst show that our approach is in keeping with well-established and commonly used measurement
techniques of trade welfare, for the standard trade expenditure function is in fact dual to
the trade benet function. We then show that this dual relation allows for a direct retrieval of
the shadow values of net imports from the trade benet function. The usefulness and operationality
of our approach is then demonstrated in a series of applications and simulations.