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The Economic effect of End to the Import Ban of Apples SPS: Application of Price-wedge Method

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  • Han, Sukho

Abstract

With the recent conclusion of the Trans-Pacific Partnership (TPP), other mega- FTAs are expected to be discussed in the near future. Since mega-FTAs discuss issues related to trade rules, approaches different from those to bilateral FTAs are necessary. In the agricultural sector, animal and plant quarantine regulations are a major trade rule. This study aims at presenting a practicable methodology to estimate economic effects of Sanitary and Phytosanitary Measures (SPS), particularly to analyze the effects of lifting an import ban on items that have not been imported. We applied the price gap approach that reflects home-good preference, and carried out a case study about apples. The results show that expected imports of apples depend on the degree of Korean consumers’ preference for domestic products. The more domestic apples are preferred, the less lifting the import ban will bring production reduction effects on apples and the overall agricultural sector. This study is expected to be used in researching basic analysis methods of strategies that can minimize Korea’s membership fee in mega-FTA negotiations, and to contribute to the trade authorities’ policy-making.

Suggested Citation

  • Han, Sukho, 2016. "The Economic effect of End to the Import Ban of Apples SPS: Application of Price-wedge Method," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 39(3), September.
    • Handle: RePEc:ags:jordng:330697
    DOI: 10.22004/ag.econ.330697
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