Import Sensitive Products and Perverse Tariff-Rate Quota Liberalization
AbstractThis paper shows that a Tariff-Rate-Quotaâ€™s (TRQ) minimum access expansion can perversely trigger domestic price increases. Often, TRQs have prohibitive over-quota tariffs to mimic import-quotas, in providing minimum market access. In the WTOâ€™s Doha Round, it is likely that countries using TRQs will avoid aggressive tariff reductions if they increase the quota portion of TRQs. We show that when the import price lies between the unit cost of production and the price received by domestic upstream firms, an increase in import quota as a share of domestic production may cause an increase in the domestic retail price.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 34570.
Date of creation: 13 Aug 2012
Date of revision:
Publication status: Published in Canadian Journal of Economics, August 2012, vol. 45 no. 3, pp. 903-924
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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Other versions of this item:
- Sébastien Pouliot & Bruno Larue, 2012. "Import sensitive products and perverse tariff-rate quota liberalization," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 903-924, August.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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- Bruno Larue & Mohamed Jeddy & Sébastien Pouliot, 2013. "On the Number of Bidders and Auction Performance: when More Means Less," Cahiers de recherche CREATE 2013-4, CREATE.
- Felt, Marie-Helene & Larue, Bruno & Gervais, Jean-Philippe, 2012.
"Compositional Standards, Import Permits and Market Structure: The Case of Canadian Cheese Imports,"
126948, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
- Marie-Hélène Felt & Bruno Larue & Jean-Philippe Gervais, 2012. "Compositional Standards, Import Permits and Market Structure: The Case of Canadian Cheese Imports," The World Economy, Wiley Blackwell, vol. 35(8), pages 1053-1072, 08.
- Lambert, Remy, 2012. "A Primer on the Economics of Supply Management and Food Supply Chains," Working Papers 125246, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
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