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Tariff rate quotas: structural and stability impacts in growing markets

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  • Philip C. Abbott
  • Philip L. Paarlberg

Abstract

This paper examines several aspects of tariff rate quotas (TRQ) as adopted during tariffication of agricultural policies under the Uruguay Round of GAIT. Quota rents and non‐tariff barrier effects may remain under TRQs, contrary to the objectives of the tariffication process. Further, price stability impacts of a TRQ are more complex than those for either tariffs or quotas, and under certain circumstances TRQs may be more stabilizing than either case, since TRQs truncate domestic production distributions much like price bands policies. This complexity results from the possibility of regime switching, and may reflect behavior under either a tariff, a quota, or a combination of cases. A TRQ policy may affect the timing of import decisions based on incentives created under quota allocation procedures envisioned for this institution. It may also allow increased imports as demand growth occurs because the quota is not necessarily a binding constraint. This means the above quota tariff is the critical policy instrument. An empirical study of Philippines port: imports illustrates these issues.

Suggested Citation

  • Philip C. Abbott & Philip L. Paarlberg, 1998. "Tariff rate quotas: structural and stability impacts in growing markets," Agricultural Economics, International Association of Agricultural Economists, vol. 19(3), pages 257-267, December.
    • Handle: RePEc:bla:agecon:v:19:y:1998:i:3:p:257-267
    DOI: 10.1111/j.1574-0862.1998.tb00530.x
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    Cited by:

    1. Balié, Jean & Valera, Harold Glenn, 2020. "Domestic and international impacts of the rice trade policy reform in the Philippines," Food Policy, Elsevier, vol. 92(C).
    2. Lips, Markus & Rieder, Peter, 2002. "Endogenous adjusted Output Quotas - The Abolishment of the Raw Milk Quota in the European Union," Conference papers 330980, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Rae, Allan N., 2001. "Trade In Livestock Products And The Wto Millenium Round: Projections To 2005 And Problems With Trq'S," 2001: International Trade in Livestock Products Symposium, January 2001, Auckland, New Zealand 14564, International Agricultural Trade Research Consortium.
    4. Abbott, Philip & Morse, B. Adair, 2000. "Tariff Rate Quota Implementation and Administration by Developing Countries," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(1), pages 115-124, April.
    5. Oyewumi, Olubukola Ayodeju, 2005. "Modeling tariff rate quotas in the South African livestock industry," Master's Degree Theses 28064, University of the Free State, Department of Agricultural Economics.
    6. Joerin, Robert, . "Improving Market Access: The Role Of Auctions In Converting Tariff-Rate Quotas Into Single Tariffs," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 17(01).
    7. GAIGNE, Carl & LAROCHE DUPRAZ, Cathie & MATTHEWS, Alan, 2015. "Thirty years of European research on international trade in food and agricultural products," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(01), March.
    8. Meilke, Karl D. & Rude, James & Burfisher, Mary E. & Bredahl, Maury E., 2001. "Market Access: Issues And Options In The Agricultural Negotiations," Commissioned Papers 14625, International Agricultural Trade Research Consortium.
    9. Lee, John G. & Paarlberg, Philip L. & Eales, James S., 2001. "Trade Policy Under Imperfect Competition: An Assessment Of The Trq On Lamb Meat," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36076, Western Agricultural Economics Association.
    10. Gervais Jean-Philippe & Rude James I, 2003. "Some Unintended Consequences of TRQ Liberalization," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-18, May.
    11. repec:ags:aoeisl:170467 is not listed on IDEAS
    12. Garcia, Roberto J., 2003. "A Case Against The Simultaneous Use Of Market Access Restrictions, Domestic Support, And Export Subsidies," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25915, International Association of Agricultural Economists.
    13. Liapis, P. & Britz, W., 2002. "Modelling TRQs in multi-commodity models," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 37.
    14. Oyewumi, Olubukola Ayodeju & Jooste, Andre & Britz, Wolfgang & van Schalkwyk, Herman D., 2007. "Tariff and Tariff Rate Quota Liberalization in the South African Livestock Industry: Approaches to Welfare Measurement," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(01), pages 1-22, March.
    15. Daria Loginova & Marco Portmann & Martin Huber, 2021. "Assessing the Effects of Seasonal Tariff‐rate Quotas on Vegetable Prices in Switzerland," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 607-627, June.
    16. de Gorter, Harry & Abbott, Philip C. & Barichello, Richard R. & Boughner, Devry S. & Bureau, Jean-Christophe & Choi, Jung-Sup & Coleman, Jonathan R. & Herrmann, Roland & Kramb, Marc Christopher & Shel, 2001. "Issues In Reforming Tariff-Rate Import Quotas In The Agreement On Agriculture In The Wto," Commissioned Papers 14617, International Agricultural Trade Research Consortium.
    17. Emlinger, Charlotte & Guimbard, Houssein, 2013. "Per-Unit Duties: Friends Or Foes Of Developing Country Exporters?," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160381, European Association of Agricultural Economists.
    18. Chang, Hung-Hao & Boisvert, Richard N. & Blandford, David, 2005. "Achieving Environmental Objectives Under Reduced Domestic Agricultural Support and Trade Liberalization: An Empirical Application to Taiwan," Agricultural and Resource Economics Review, Cambridge University Press, vol. 34(1), pages 16-31, April.
    19. Li, Xianghong & Carter, Colin A., 2005. "Agricultural Tariff Rate Quotas: Impacts on Market Access," 2005 Annual meeting, July 24-27, Providence, RI 19413, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Houssein Guimbard & Sébastien Jean & Mondher Mimouni & Xavier Pichot, 2012. "MAcMap-HS6 2007, an Exhaustive and Consistent Measure of Applied Protection in 2007," International Economics, CEPII research center, issue 130, pages 99-122.
    21. Chiedza L. Muchopa, 2021. "Economic Impact of Tariff Rate Quotas and Underfilling: The Case of Canned Fruit Exports from South Africa to the EU," Economies, MDPI, vol. 9(4), pages 1-17, October.
    22. Kim, Youngmi & Jeong, Deokjae, 2025. "할당관세 정책이 농산물 소매가격에 미치는 인과적 영향 [The Causal Effects of Tariff-Rate Quota Policies on Agricultural Product Retail Prices]," MPRA Paper 126998, University Library of Munich, Germany.
    23. Elbehri, Aziz & Ken Pearson, 2000. "Implementing Bilateral Tariff Rate Quotas in GTAP using GEMPACK," GTAP Technical Papers 475, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    24. Khorana, Sangeeta, 2008. "The Developmental Relevance of Tariff Rate Quotas as a Market Access Instrument: An Analysis of Swiss Agricultural Imports," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 9(2), pages 1-24.

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