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Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs

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Author Info
Yue, Chengyan
Beghin, John C.
Jensen, Helen H.

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Abstract

The price-wedge method yields a tariff-equivalent estimate of technical barriers to trade (TBT). An extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs. We explore the sensitivity of this revamped TBT estimate to its key determinants (substitution elasticity, preference for home good, and trade cost). We use the augmented approach to investigate the ongoing US-Japan apple trade dispute and find that removing the Japanese TBT would yield limited export gains to the United States. We then draw policy implications of our findings.

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Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12453.

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Date of creation: 01 Nov 2005
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Publication status: Published in American Journal of Agricultural Economics, November 2006, Vol. 88, No. 4, pp. 947-960.
Handle: RePEc:isu:genres:12453

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Keywords: apple; Japan; SPS; TBT; technical barriers to trade; trade cost; trade dispute; WTO.;

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  1. Bureau, Jean-Christophe & Marette, Stephan & Schiavina, Alessandra, 1998. "Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-62.
  2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  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.
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  4. John C. Beghin & Jean-Christophe Bureau, 2001. "Quantitative Policy Analysis of Sanitary, Phytosanitary and Technical Barriers to Trade," Economie Internationale, CEPII research center, issue 3Q, pages 107-130. [Downloadable!]
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  5. Keith Head & Thierry Mayer, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center. [Downloadable!]
  6. Calvin, Linda & Krissoff, Barry, 1998. "Technical Barriers To Trade: A Case Study Of Phytosanitary Barriers And U.S. - Japanese Apple Trade," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(02), December. [Downloadable!]
  7. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June. [Downloadable!]
  8. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD, Economics Department. [Downloadable!]
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  1. Nimenya, N. & Henry de Franhan, B. & Ndimira, P.F., 2008. "Quantifying non-tariff measures in international agricultural trade: a tariff equivalent of technical barriers to trade on African horticultural exports to the European markets," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44195, European Association of Agricultural Economists. [Downloadable!]
  2. JINJI Naoto, 2009. "An Economic Theory of the SPS Agreement," Discussion papers 09033, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  3. Salvatici, Luca & Cipollina, Maria, 2006. "Measuring Protection: Mission Impossible?," Working Papers 18876, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
    Other versions:
  4. INABA Masaru & NUTAHARA Kengo, 2009. "The Role of Investment Wedges in the Carlstrom-Fuerst Economy and Business Cycle Accounting," Discussion papers 09030, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
    Other versions:
  5. Niemi, J. & Peltola, J. & Simola, A., 2008. "Technical Barrier Effects of a Food Safety Measure – a Case of Finnish Salmonella Control Program," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43953, European Association of Agricultural Economists. [Downloadable!]
  6. Uttam Kumar Deb, 2006. "Rules of Origin and Non-Tariff Barriers in Agricultural Trade: Perspectives from Bangladesh and Cambodia," Working Papers 1206, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.. [Downloadable!]
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