In a recent article in this Journal, Friedlander and Vandendorpe (1968), hereafter referred to as F-V, derived the welfare-maximizing tax rates on consumption or production for a country that possesses some monopoly power in international trade but is free neither to use a tariff nor to exploit that power by an equivalent equal rate tax on the production of exportables and subsidy on the consumption of importables. The present paper considers the general case of their analysis, in which a country has some monopoly or monopsony power in international trade and is employing three fiscal instruments-an export or import tax or subsidy, a production tax or subsidy, and a consumption tax or subsidy-any two of which are arbitrarily fixed, so that the problem is to choose the level of the third so as to reach a second-best welfare optimum. Since a tax or subsidy on either exports or imports is a tax on trade, and a subsidy or tax on the production or consumption of one commodity is a tax or subsidy on the production or consumption of the other, the problem can be formulated with full generality in terms of a tariff, a production tax, and a consumption subsidy; and, given the starting point of an optimum-tariff possibility, it is most convenient to assume that all three fiscal impositions apply to the economy's exportable good (since, at zero levels of the other two, a positive level of the third will be required to exploit the optimum-tariff possibility). The paper develops formulas for the second-best optimal tariff, tax, and subsidy rates. These rates are shown to equal the "effective rate of distortion," a new concept which provides a unifying interpretation of the optimality conditions derived in the analysis.