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Economic issues in tariffication: an overview

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  • Moschini, Giancarlo

Abstract

Tariffication is an effort to convert all existing agricultural nontariff barriers (NTBs) to trade into bound tariffs and to reduce these tariffs over time. The main economic issues that arise with tariffication stem from the nonequivalence of tariffs in NTBs in a number of scenarios. This paper analyzes nonequivalence arising from the existence of imperfect competition in importing countries, price instability in importing and exporting countries, and inefficient allocation of quantitative restrictions. It is shown that in all these cases the definition of an appropriate "equivalent tariff" to be used in tariffication is not straightforward, and that in general this equivalent tariff cannot be computed on the basis of only observed price differences between countries. Tariff-rate quotas, which are meant to be the main tool in implement tariffication according to the existing proposal, are analyzed in some detail. Concerning the relationship between tariffication and the other elements of the trade liberalization package, it is shown that tariffication would limit the scope of export subsidy policies, and that the existence of production and export subsidies makes observed price gaps between countries of questionable value in setting equivalent tariff levels. Finally, it is argued that the main focus on tariffication should be the conversion of NTBs to acceptable long-run (bound) tariffs rates, and considerable flexibility in the conversion process could be exercised during the transition period.
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  • Moschini, Giancarlo, 1991. "Economic issues in tariffication: an overview," Agricultural Economics, Blackwell, vol. 5(2), pages 101-120, June.
    • Handle: RePEc:eee:agecon:v:5:y:1991:i:2:p:101-120
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    1. Heru Iswahyudi, 2016. "Back to oil: Indonesia economic growth after Asian financial crisis," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(1), pages 25-44, April.
    2. John C. Beghin & Barbara El Osta & Jay R. Cherlow & Samarendu Mohanty, 2003. "The Cost Of The U.S. Sugar Program Revisited," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 106-116, January.
    3. Kala Krishna & Ling H. Tan, 2007. "Trade Policy with Heterogeneous Traders: Do Quotas Get a Bum Rap?," NBER Working Papers 13040, National Bureau of Economic Research, Inc.
    4. John C. Beghin & Heidi Schweizer, 2021. "Agricultural Trade Costs," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 500-530, June.
    5. Wannaphong Durongkaveroj & Taehyun Ryu, 2019. "Relative effects of trade liberalization on poverty: Evidence from Thailand," Progress in Development Studies, , vol. 19(4), pages 264-283, October.
    6. Daria Loginova & Marco Portmann & Martin Huber, 2021. "Assessing the Effects of Seasonal Tariff‐rate Quotas on Vegetable Prices in Switzerland," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 607-627, June.
    7. Boughner, Devry S. & de Gorter, Harry & Sheldon, Ian M., 2000. "The Economics Of Two-Tier Tariff-Rate Import Quotas In Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(1), pages 1-12, April.
    8. Meilke, Karl D. & Huff, Karen, 2001. "Trade Liberalization Under Nafta: Where From Here?," Proceedings of the 6th Agricultural and Food Policy Systems Information Workshop, 2000: Trade Liberalization Under NAFTA: Report Card on Agriculture 16819, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    9. Garcia, Roberto J., 2015. "No Way to Meet Commitments for Norway’s Meat Imports: An Assessment of WTO Disciplines on Market Access in Agriculture," Working Paper Series 03-2015, Norwegian University of Life Sciences, School of Economics and Business.
    10. Mohanty, Samarendu & Beghin, John C. & Kaus, Phillip J., 2001. "Impacts Of Federal Support Programs For Sugar And Peanuts Compared To Corn And Wheat On U.S. And World Markets," 2001 Annual meeting, August 5-8, Chicago, IL 20610, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Barichello, Richard R. & Cranfield, John & Meilke, Karl D., "undated". "Options for Supply Management in Canada with Trade Liberalization," 2006 NAAMIC Workshop III: Achieving NAFTA Plus 163876, North American Agrifood Market Integration Consortium (NAAMIC).
    12. Krishna, Kala & Tan, Ling Hui, 2010. "Trade policy with endogenous entry revisited," Journal of International Economics, Elsevier, vol. 80(2), pages 271-279, March.
    13. Rude, James & Meilke, Karl D., 2005. "Implications of the July 2004 WTO Framework Agreement for Canadian Agriculture," Commissioned Papers 24159, Canadian Agricultural Trade Policy Research Network.
    14. Nordstrom, Hakan, 2001. "Do variable levies beggar thy neighbour?," European Journal of Political Economy, Elsevier, vol. 17(2), pages 403-420, June.
    15. Meilke, Karl D. & Lariviere, Sylvain, 1999. "The Problems And Pitfalls In Modeling International Dairy Trade Liberalization," Working Papers 14579, International Agricultural Trade Research Consortium.
    16. Meilke, Karl D. & Rude, James & Burfisher, Mary E. & Bredahl, Maury E., 2001. "Market Access: Issues And Options In The Agricultural Negotiations," Commissioned Papers 14625, International Agricultural Trade Research Consortium.
    17. Cymbal, W. & Veeman, M.M., 1994. "Canadian Agriculture and GATT: An Economic Analysis of Article XI," Project Report Series 232387, University of Alberta, Department of Resource Economics and Environmental Sociology.
    18. Rakotoarisoa, Manitra A., 2006. "Policy distortions in the segmented rice market:," MTID discussion papers 94, International Food Policy Research Institute (IFPRI).
    19. Anonymous & Meilke, Karl D. & Knutson, Ronald D. & Ochoa, Rene F. & Rude, James, 2006. "Achieving NAFTA Plus," 2006 NAAMIC Workshop III: Achieving NAFTA Plus 163871, North American Agrifood Market Integration Consortium (NAAMIC).

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