Measuring domestic implications of tariff cuts under EU entry price regime
The entry price regime in the European Union (EU) applies to several products, mainly fresh fruits and vegetables. The complexity of the system with endogenous applied tariffs makes the evaluation of different alternatives of tariff cuts more challenging than for other regimes. The challenge applies to academics with interest on estimating market impacts, to WTO negotiators that need to evaluate proposals and to policy-makers that may need to take decisions on options such as the declaration of a sensitive product. This paper develops a methodology to compare different tariff cuts alternatives, including the URAA method that implies reductions in the level of the entry price, constant entry price, and Tariff Rate Quotas expansion. Uncertainty about international prices plays a central role on the estimated impacts on market access of different options. Reducing the level of entry prices can have relatively large impacts on market access for some products. The sensitive product treatment with TRQs may generate larger market access than the normal treatment. The proposed methodology proofs to be able to quantify the economic impacts of tariff cuts under EU entry price regime.
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