IDEAS home Printed from https://ideas.repec.org/a/eej/eeconj/v13y1987i4p389-397.html
   My bibliography  Save this article

On Estimating the Static Effects of Preferential Tariffs

Author

Listed:
  • Dennis G. Beckmann

Abstract

It is shown that the estimates of trade creation, trade diversion, and the erosion of GSP benefits derived from the well-known methodology of Robert Baldwin and Tracy Murray (1977) are biased for two reasons. First, the estimates neglect an intercommodity substitution and secondly, the estimates are based on free on board values of imports rather than the values actually paid by consumers in the donor country. Acknowledging these biases results in the overestimation of the aforementioned aggregate effects by 9 percent, 57 percent, and 54 percent respectively. The implicit own- and cross-price elasticities of demand of the corrected methodology are also reported.

Suggested Citation

  • Dennis G. Beckmann, 1987. "On Estimating the Static Effects of Preferential Tariffs," Eastern Economic Journal, Eastern Economic Association, vol. 13(4), pages 389-397, Oct-Dec.
    • Handle: RePEc:eej:eeconj:v:13:y:1987:i:4:p:389-397
    as

    Download full text from publisher

    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume13/V13N4P389_397.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Baldwin, R E & Murray, Tracy, 1977. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP," Economic Journal, Royal Economic Society, vol. 87(345), pages 30-46, March.
    2. Ahmad, Jaleel, 1978. "Tokyo Rounds of Trade Negotiations and the Generalised System of Preferences," Economic Journal, Royal Economic Society, vol. 88(350), pages 285-295, June.
    3. Rousslang, Donald & Parker, Stephen, 1984. "Cross-Price Elasticities of U.S. Import Demand," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 518-523, August.
    4. Pomfret, Richard, 1986. "MFN Tariff Reductions and Developing Country Trade Benefits under the GSP: A Comment," Economic Journal, Royal Economic Society, vol. 96(382), pages 534-536, June.
    5. Clague, Christopher, 1971. "Tariff Preferences and Separable Utility," American Economic Review, American Economic Association, vol. 61(2), pages 188-194, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kara Reynolds, 2005. "The Erosion of Tariff Preferences: The Impact of U.S. Tariff Reductions on Developing Countries," International Trade 0507001, University Library of Munich, Germany.
    2. Dale Truett & Lila Truett, 1993. "Trade preferences and exports of manufactures: A case study of Bolivia and Brazil," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(3), pages 573-590, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. W. Sawyer & Richard Sprinkle, 1989. "Alternative empirical estimates of trade creation and trade diversion: A comparison of the Baldwin-Murray and Verdoorn models," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(1), pages 61-73, March.
    2. Dale Truett & Lila Truett, 1993. "Trade preferences and exports of manufactures: A case study of Bolivia and Brazil," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(3), pages 573-590, September.
    3. Wylie, Peter J., 1995. "Partial equilibrium estimates of manufacturing trade creation and diversion due to NAFTA," The North American Journal of Economics and Finance, Elsevier, vol. 6(1), pages 65-84.
    4. Seyoum, Belay, 2006. "US trade preferences and export performance of developing countries: Evidence from the generalized system of preferences," International Business Review, Elsevier, vol. 15(1), pages 68-83, February.
    5. Clinton Shiells, 1989. "Competition and complementarity between U.S. imports from developed and newly industrializing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(1), pages 114-128, March.
    6. Dutt, Pushan & Mihov, Ilian & Van Zandt, Timothy, 2013. "The effect of WTO on the extensive and the intensive margins of trade," Journal of International Economics, Elsevier, vol. 91(2), pages 204-219.
    7. Langhammer, Rolf J., 1980. "Effekte der Handelsschaffung und Handelsumlenkung," Open Access Publications from Kiel Institute for the World Economy 3691, Kiel Institute for the World Economy (IfW Kiel).
    8. Lord, Montague, 2000. "Viet Nam: Small Scale Technical assistance for Capacity Building of Ministry of Finance to Support Tariff, Industry and Subsidy Analysis for the WTO Accession," MPRA Paper 41158, University Library of Munich, Germany.
    9. Busse, Matthias & Shams, Rasul, 2003. "Trade Effects of the East African Community: Do We Need a Transitional Fund?," HWWA Discussion Papers 240, Hamburg Institute of International Economics (HWWA).
    10. André Sapir & Lars Lundberg, 1984. "The U.S. Generalized System of Preferences and Its Impacts," NBER Chapters, in: The Structure and Evolution of Recent US Trade Policy, pages 195-236, National Bureau of Economic Research, Inc.
    11. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2008. "Make Trade Not War?," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 865-900.
    12. David Karemera & Won W. Koo, 1994. "Trade Creation And Diversion Effects Of The U.S.‐Canadian Free Trade Agreement," Contemporary Economic Policy, Western Economic Association International, vol. 12(1), pages 12-23, January.
    13. Hiemenz U. & Langhammer, Rolf J., 1986. "Efficiency pre-conditions for successful integration of developing countries into the world economy," ILO Working Papers 992485213402676, International Labour Organization.
    14. Mary Amiti & John Romalis, 2007. "Will the Doha Round Lead to Preference Erosion?," IMF Staff Papers, Palgrave Macmillan, vol. 54(2), pages 338-384, June.
    15. Yamazaki, Fumiko, 1996. "Potential erosion of trade preferences in agricultural products," Food Policy, Elsevier, vol. 21(4-5), pages 409-417.
    16. Busse, Matthias & Shams, Rasul, 2005. "Trade Effects of the East African Community," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(1), pages 1-22.
    17. Van Zandt, Timothy & Mihov, Ilian & Dutt, Pushan, 2011. "Does WTO Matter for the Extensive and the Intensive Margins of Trade?," CEPR Discussion Papers 8293, C.E.P.R. Discussion Papers.
    18. Radoslav Ivancik, 2022. "Security And Defence Policy Of The European Union In The Context Of The Conflict In Ukraine," Medzinarodne vztahy (Journal of International Relations), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 20(4), pages 373-388.
    19. Madanmohan Ghosh & Carlo Perroni & John Whalley, 1998. "The Value of MFN Treatment," NBER Working Papers 6461, National Bureau of Economic Research, Inc.
    20. Rodrigo Peruga, 1994. "Trade balances: do exchange rates matter?," Documentos de Trabajo del ICAE 9410, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:13:y:1987:i:4:p:389-397. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Matheson, College of the Holy Cross (email available below). General contact details of provider: https://edirc.repec.org/data/eeaa1ea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.