An Economy-wide Analysis of Impacts on Taiwan of Reducing Tariff Escalation on Agriculture-Related Products in WTO Doha Round Negotiations
AbstractTariff escalation becomes one of the major issues in the new Doha Round negotiation because it is viewed as a stumbling block to the industrialization development for the developing countries. When tariffs on products escalate with the stage of processing, the effective rate of protection, or the tariff expressed as fractions of value-added after deducting intermediate inputs from product value, also increases. Thus, tariff escalation potentially signals high rates of protection for value-added or processed products, and can inhibit international trade in these goods. The major purpose of this study is to examine the degrees of tariff escalations in Taiwan's agriculture -related commodities and the economic consequences to reduce them. A simplified theoretical model is first established to illustrate the structural impacts and welfare implications of reducing tariff escalation. Then a computable general equilibrium (CGE) model of Taiwan is applied to simulate the economy-wide impacts of three alternative reduction proposals. The model distinguishes 160 sectors, 6 types of labor, 8 types of margins and 160 commodities compiled from the Input-Output tables of 2004. Simulation results indicate that if welfare improvement is the major policy concern, then Taiwan should favor the reduction because it improves the overall welfare of Taiwan. However, if farmers' welfare is the major policy concern, then Taiwan should act against the reduction. In case the consensus to reduce tariff escalations has been determined, then the second-best choice would be to offer upstream industries relatively smaller tariff reduction rates than the downstream industries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6170.
Date of creation: 2008
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
tariff escalation; tariff wedge; computable general equilibrium model; International Relations/Trade; F13; C68; Q17;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- W. Jill Harrison & K.R. Pearson, 1994.
"Computing Solutions for Large General Equilibrium Models Using GEMPACK,"
Centre of Policy Studies/IMPACT Centre Working Papers
ip-64, Monash University, Centre of Policy Studies/IMPACT Centre.
- Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Society for Computational Economics, vol. 9(2), pages 83-127, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.