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Differential export taxes along the oilseeds value chain: a partial equilibrium analysis

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  • Antoine Bouet

    (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - Université Montesquieu - Bordeaux IV : EA2954)

  • Carmen Estrades

    (IFPRI - International Food Policy Research Institute - aaa)

  • David Laborde

    ()
    (IFPRI - International Food Policy Research Institute - aaa)

Abstract

This paper studies the implementation of Differential Export Tax (DET) rates along value chains, in particular in the oilseeds chain (seeds/vegetable oils/biodiesel): this trade policy consists in relatively high export taxes on raw commodities and relatively low taxes on processed goods. This policy may generate public revenues and benefit final consumption by lowering domestic prices of vegetable oils and biodiesel, and also promotes production at more processed stages of transformation, particularly in response to tariff escalation by importing partners. We first study the theoretical justification of this trade policy with a simple international trade model. It shows how implementing a tax on exports of raw agricultural commodity in a country exporting seeds and vegetable oils, augments the sum of profits and final consumers' surplus in the processing sector, of farmers' surplus, and of public revenues. Then we develop a world partial equilibrium model of the oilseed value chain that illustrates these theoretical conclusions. We simulate: (i) the elimination of DETs in Argentina, Indonesia and Ukraine; (ii) the elimination of import tariffs applied by the EU and the US on the same goods; (iii) the elimination of DETs in Argentina, Indonesia and Ukraine and of import tariffs applied by the EU and the US. According to our estimates, both consumers and producers throughout the world benefit from the removal of export taxes in these value chains, respectively 931 million USD and 2.2 billion USD. The third scenario leads to a significant expansion of world production of all activities along the value chain, including the production of biodiesel for which world output would expand by one percent.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00780574.

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Date of creation: 17 Jan 2013
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Handle: RePEc:hal:wpaper:hal-00780574

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Keywords: export tax; tariff escalation; oilseeds; partial equilibrium model;

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  1. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers, Tel Aviv 21-92, Tel Aviv.
  2. Eaton, Jonathan & Grossman, Gene M, 1986. "Optimal Trade and Industrial Policy under Oligopoly," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 101(2), pages 383-406, May.
  3. Antoine Bouët & David Laborde Debucquet, 2012. "Food crisis and export taxation: the cost of non-cooperative trade policies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 148(1), pages 209-233, April.
  4. Bernhofen, Daniel M, 1997. "Strategic Trade Policy in a Vertically Related Industry," Review of International Economics, Wiley Blackwell, vol. 5(3), pages 429-33, August.
  5. David Laborde & Carmen Estrades & Antoine Bouët, 2013. "A Global Assessment of the Economic Effects of Export Taxes," The World Economy, Wiley Blackwell, vol. 36(10), pages 1333-1354, October.
  6. Mohamad F. Hasan & Michael R. Reed & Mary A. Marchant, 2001. "Effects of an Export Tax on Competitiveness: The Case of the Indonesian Palm Oil Industry," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, Chung-Ang Unviersity, Department of Economics, vol. 26(2), pages 77-90, December.
  7. Rodrik, Dani, 1989. "Optimal trade taxes for a large country with non-atomistic firms," Journal of International Economics, Elsevier, Elsevier, vol. 26(1-2), pages 157-167, February.
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Cited by:
  1. Olga Solleder, 2013. "Panel Export Taxes (PET) Dataset: New Data on Export Tax Rates," IHEID Working Papers, Economics Section, The Graduate Institute of International Studies 07-2013, Economics Section, The Graduate Institute of International Studies, revised 04 Apr 2013.

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