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Shipping the good beef out: EU trade liberalization to Mercosur exports

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Author Info
Ramos, Maria Priscila
Bureau, Jean Christophe
Salvatici, Luca

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Abstract

The European Union tariff schedule includes a large number of specific and composite tariffs as well as many tariff-rate quotas (TRQs), which affect the composition of imports. By altering price ratios between products with different unit values, both can generate the typical Alchian-Allen ’shipping the good apples out’ effect in foreign countries’ exports to the EU. Different patterns of trade liberalization, either through tariff reduction or an expansion in preferential-access quotas, might have different consequences for producers and consumers because of changes in the composition of trade. We illustrate the issues at stake in the beef sector, focusing on Mercosur exports to the EU. We model import demand for different qualities in the presence of a TRQ and we derive comparative statics results for changes in various policy variables.

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Publisher Info
Paper provided by TRADEAG - Agricultural Trade Agreements in its series Working Papers with number 7215.

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Date of creation: 2007
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Handle: RePEc:ags:tragwp:7215

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Related research
Keywords: Mercosur; European Union; quality; trade; tariff; tariff-rate quota; International Relations/Trade; Livestock Production/Industries; F13; F15; F17; Q17;

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References listed on IDEAS
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.:
  1. Feenstra, R.C., 1995. "Estimating the Effects of Trade Policy," Papers 95-10, California Davis - Institute of Governmental Affairs.
    Other versions:
  2. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium. [Downloadable!]
  3. David Hummels & Alexandre Skiba, 2004. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1384-1402, December.
    Other versions:
  4. Thomas Hertel & David Hummels & Maros Ivanic & Roman Keeney, 2004. "How Confident Can We Be in CGE-Based Assessments of Free Trade Agreements?," NBER Working Papers 10477, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January. [Downloadable!] (restricted)
  6. Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-38, February. [Downloadable!] (restricted)
  7. James E. Anderson, 1988. "The Relative Inefficiency of Quotas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511789.
  8. Yvan Decreux & Hugo Valin, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 2007-15, CEPII research center. [Downloadable!]
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  9. Anderson, James E, 1985. "The Relative Inefficiency of Quotas: The Cheese Case," American Economic Review, American Economic Association, vol. 75(1), pages 178-90, March. [Downloadable!] (restricted)
  10. Carlos Alfredo Rodriguez, 1979. "The Quality of Imports and the Differential Welfare Effects of Tariffs, Quotas, and Quality Controls as Protective Devices," Canadian Journal of Economics, Canadian Economics Association, vol. 12(3), pages 439-49, August. [Downloadable!] (restricted)
  11. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November. [Downloadable!] (restricted)
  12. Grant, Jason H. & Hertel, Thomas W. & Rutherford, Thomas F., 2006. "Extending General Equilibrium to the Tariff Line: U.S. Dairy in the Doha Development Agenda," 2006 Annual meeting, July 23-26, Long Beach, CA 21409, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  13. Marcelo Olarreaga & Çaglar Özden, 2005. "AGOA and Apparel: Who Captures the Tariff Rent in the Presence of Preferential Market Access?," The World Economy, Blackwell Publishing, vol. 28(1), pages 63-77, 01. [Downloadable!] (restricted)
  14. Matthieu Crozet & Hélène Erkel-Rousse, 2004. "Trade Performances, Product Quality Perceptions, and the Estimation of Trade Price Elasticities," Review of International Economics, Blackwell Publishing, vol. 12(1), pages 108-129, 02. [Downloadable!] (restricted)
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  15. Nathalie Lavoie, 2005. "Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(4), pages 835-854, November. [Downloadable!] (restricted)
  16. Philip C. Abbott, 2002. "Tariff-rate quotas: failed market access instruments?," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 29(1), pages 109-130, March.
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  1. Ramos, Maria Priscila, 2007. "Politique Commerciale, Qualité et Environnement: une Application aux Négociations Commerciales entre l’Union Européenne et le Mercosur
    [Trade Policy, Quality and the Environment: an applicatio    ," MPRA Paper 12640, University Library of Munich, Germany. [Downloadable!]
  2. DECREUX, Yvan & RAMOS, Maria Priscila, 2007. "How does tariff-rate quota modelling affect CGE results? An application for MIRAGE," Working Papers 7206, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
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