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

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  • Ramos, Maria Priscila
  • Bureau, Jean-Christophe
  • Salvatici, Luca

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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Bibliographic 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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Web page: http://tradeag.vitamib.com/

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

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  1. Nathalie Lavoie, 2005. "Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 835-854.
  2. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
  3. James E. Anderson, 1991. "The Coefficient of Trade Utilization: The Cheese Case," NBER Chapters, in: Empirical Studies of Commercial Policy, pages 221-244 National Bureau of Economic Research, Inc.
  4. Yoram Bauman, 2004. "Shipping the Good Apples Out: A New Perspective," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 534-536, July.
  5. 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.
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  7. Philip C. Abbott, 2002. "Tariff-rate quotas: failed market access instruments?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(1), pages 109-130, March.
  8. David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
  9. James E. Anderson, 1988. "The Relative Inefficiency of Quotas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511789, December.
  10. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
  11. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium.
  12. Matthieu Crozet & Hélène Erkel-Rousse, 2004. "Trade performances, product quality perceptions and the estimation of trade price-elasticities," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00096826, HAL.
  13. 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).
  14. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595 Elsevier.
  15. Robert C. Feenstra, 1984. "Voluntary Export Restraint in U.S. Autos, 1980-81: Quality, Employment, and Welfare Effects," NBER Chapters, in: The Structure and Evolution of Recent U.S. Trade Policy, pages 35-66 National Bureau of Economic Research, Inc.
  16. 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.
  17. 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.
  18. repec:hal:journl:halshs-00096826 is not listed on IDEAS
  19. 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.
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  21. 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.
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Citations

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Cited by:
  1. Ramos, Maria Priscila, 2007. "Politique Commerciale, Qualité et Environnement: une Application aux Négociations Commerciales entre l’Union Européenne et le Mercosur," MPRA Paper 12640, University Library of Munich, Germany.
  2. Narayanan, Badri G. & Hertel, Thomas W. & Horridge, J. Mark, 2010. "Disaggregated data and trade policy analysis: The value of linking partial and general equilibrium models," Economic Modelling, Elsevier, vol. 27(3), pages 755-766, May.
  3. 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.

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