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

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  • Chengyan Yue
  • John Beghin
  • Helen H. Jensen

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 recent Japan–U.S. 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. Copyright 2006, Oxford University Press.

Suggested Citation

  • Chengyan Yue & John Beghin & Helen H. Jensen, 2006. "Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 947-960.
  • Handle: RePEc:oup:ajagec:v:88:y:2006:i:4:p:947-960
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, pages 691-751.
    2. 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.
    3. Josling, Timothy E. & Roberts, Donna & Orden, David, 2004. "Food Regulation And Trade: Toward A Safe And Open Global System -- An Overview And Synopsis," 2004 Annual meeting, August 1-4, Denver, CO 20008, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. John C. Beghin & Jean-Christophe Bureau, 2017. "Quantitative Policy Analysis Of Sanitary, Phytosanitary And Technical Barriers To Trade," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 3, pages 39-62 World Scientific Publishing Co. Pte. Ltd..
    5. repec:oup:revage:v:30:y:2008:i:1:p:120-135. is not listed on IDEAS
    6. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
    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.
    8. Linda Calvin & Barry Krissoff & William Foster, 2008. "Measuring the Costs and Trade Effects of Phytosanitary Protocols: A U.S.–Japanese Apple Example," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 120-135.
    9. Kenneth C. Gehrt & Sherry Lotz & Soyeon Shim & Tomoaki Sakano & Naoto Onzo, 2005. "Overcoming informal trade barriers among Japanese intermediaries: An attitudinal assessment," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 53-63.
    10. 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, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-462.
    11. Timothy E. Josling & Donna Roberts & David Orden, 2004. "Food Regulation and Trade: Toward a Safe and Open Global System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 347.
    12. 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.
    13. Chikako Kajikawa, 1998. "Quality level and price in Japanese apple market," Agribusiness, John Wiley & Sons, Ltd., vol. 14(3), pages 227-234.
    14. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD Publishing.
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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