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Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade

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  • Chengyan Yue
  • John C. Beghin

Abstract

We derive a method to econometrically estimate the tariff equivalent and forgone trade effects of a prohibitive technical barrier to trade (TBT) based on Wales and Woodland’s Kuhn-Tucker approach to corner solutions in consumer choice. The method overcomes the lack of observed data on bilateral trade flows and accounts for differentiated goods by place of origin. We apply the derived random utility model to international trade in apples to identify the tariff equivalent of prohibitive phytosanitary barriers imposed by Australia on potential imports of New Zealand apples. We estimate the forgone apple trade between the two countries, the implied trade injury imposed by Australia on New Zealand, and the welfare loss to Australia. The removal of the Australian policy would induce net welfare gains around US$50 million annually for Australia. Copyright 2009, Oxford University Press.

Suggested Citation

  • Chengyan Yue & John C. Beghin, 2009. "Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 930-941.
  • Handle: RePEc:oup:ajagec:v:91:y:2009:i:4:p:930-941
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2009.01306.x
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    Cited by:

    1. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 6, pages 105-108 World Scientific Publishing Co. Pte. Ltd..
    2. Tena-Junguito, Antonio & Lampe, Markus & Fernandes, Felipe Tâmega, 2012. "How Much Trade Liberalization Was There in the World Before and After Cobden-Chevalier?," The Journal of Economic History, Cambridge University Press, vol. 72(03), pages 708-740, September.
    3. Sampath Jayasinghe & John C. Beghin & Giancarlo Moschini, 2017. "Determinants Of World Demand For U.S. Corn Seeds: The Role Of Trade Costs," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 17, pages 309-320 World Scientific Publishing Co. Pte. Ltd..
    4. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    5. John Beghin & Mark Melatos, 2017. "The Trade and Welfare Impacts of Australian Quarantine Policies: The Case of Pigmeat," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 15, pages 271-286 World Scientific Publishing Co. Pte. Ltd..
    6. Keiichiro Honda, 2012. "Tariff equivalent of Japanese sanitary and phytosanitary: Econometric estimation of protocol for U.S.-Japanese apple trade," Economics Bulletin, AccessEcon, vol. 32(2), pages 1226-1237.
    7. Andrea Dal Bianco & Vasco Ladislao Boatto & Francesco Caracciolo & Fabio Gaetano Santeramo, 2016. "Tariffs and non-tariff frictions in the world wine trade," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 43(1), pages 31-57.
    8. Ferrier, Peyton, 2014. "The Effects of Phytosanitary Regulations on U.S. Imports of Fresh Fruits and Vegetables," Economic Research Report 176199, United States Department of Agriculture, Economic Research Service.
    9. Ronen, Eyal & Dawar, Kamala, 2016. "How Necessary? A Comparison of Legal and Economic Assessments GATT Dispute Settlements under: Article XX(b), TBT 2.2 and SPS 5.6," MPRA Paper 83834, University Library of Munich, Germany.
    10. Ferrier, Peyton & Zhen, Chen, 2014. "Explaining the Shift from Preserved to Fresh Vegetable Consumption," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170555, Agricultural and Applied Economics Association.
    11. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL 116898, International Agricultural Trade Research Consortium.
    12. Taghouti, Ibtissem & Martinez-Gomez, Victor & Coque, José María Garcia Alvarez, 2015. "Exploring Eu Food Safety Notifications On Agro-Food Imports: Are Mediterranean Partner Countries Discriminated?," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 0(Number 2), pages 1-15, April.
    13. Taghouti, Ibtissem & Martinez-Gomez, Victor & Marti, Luisa, 2017. "Sanitary and Phytosanitary measures in agri-food imports from the European Union: Reputation effects over time," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 0(Number 02), January.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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