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The Liberalisation of Tariff Rate Quotas under Oligopolistic Competition

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  • Margherita Scoppola

Abstract

Several proposals for liberalising agricultural tariff rate quotas (TRQs) have been proposed within the WTO Doha Development Round. The literature suggests that the effectiveness of liberalisation depends upon which of the three elements of a TRQ constrains imports. Most contributions assume perfect competition. This article uses an oligopoly two‐stage capacity constrained model, in which the mode of competition is endogenous, to investigate the impact of different liberalisation options of TRQs, that is, the reduction in the in‐quota and out‐of‐quota tariffs and the expansion of the quota. This article shows that consideration of the nature of competition between traders may provide unconventional conclusions about the effectiveness of the various TRQ liberalisation options; furthermore, the article shows how an increase in the number of rivals, under certain circumstances, may be more effective in increasing trade than reducing tariffs.

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  • Margherita Scoppola, 2010. "The Liberalisation of Tariff Rate Quotas under Oligopolistic Competition," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 584-604, September.
    • Handle: RePEc:bla:jageco:v:61:y:2010:i:3:p:584-604
    DOI: 10.1111/j.1477-9552.2010.00258.x
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    References listed on IDEAS

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    1. Maria Priscila Ramos & Jean-Christophe Bureau & Luca Salvatici, 2010. "Trade composition effects of the EU tariff structure: beef imports from Mercosur," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(1), pages 1-26, March.
    2. Carter, Colin A & MacLaren, Donald, 1997. "Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 373-385, August.
    3. Jean-Philippe Gervais & David Surprenant, 2000. "An Economic Investigation of the Import Licensing Methods and TRQs in Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(4), pages 397-410, December.
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    6. Maggi, Giovanni, 1996. "Strategic Trade Policies with Endogenous Mode of Competition," American Economic Review, American Economic Association, vol. 86(1), pages 237-258, March.
    7. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, December.
    8. James I. Rude & Jean‐Philippe Gervais, 2006. "Tariff‐Rate Quota Liberalization: The Case of World Price Uncertainty and Supply Management," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 33-54, March.
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    Cited by:

    1. Abbassi, Abdessalem & Tamini, Lota D. & Dakhlaoui, Ahlem, 2015. "Import quota allocation between regions under Cournot competition," Economic Modelling, Elsevier, vol. 51(C), pages 484-490.
    2. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.

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    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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