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Modifying Export Taxes and Quotas To Make Them Less Market-Distorting

Author

Listed:
  • Liefert, William M.
  • Westcott, Paul C.
  • Wainio, John

Abstract

This paper examines how conventional export taxes and quotas can be modified to make them less market-distorting, and thereby less welfare-diminishing. The modified policies achieve the same economic objectives of the tax or quota, such as reducing the domestic price of the exported good, increasing domestic purchases, and raising revenue, but also generate additional exports beyond the volume that the tax/quota alone would allow. Also, the policies do not involve any government subsidies to either producers or consumers. We examine two scenarios. The first is when a tax or quota is already in place, as in the case of longstanding export taxes that many countries maintain for exports of agricultural, fishery, and forestry products, minerals, and metals. The second scenario is when a measure is not yet in place but a country wishes to impose one, as in the case of short run agricultural export restrictions that countries have enacted in recent years to restrain increases in domestic food commodity prices. We also examine the outcome when the country does and does not have world market power in the exported good.

Suggested Citation

  • Liefert, William M. & Westcott, Paul C. & Wainio, John, 2013. "Modifying Export Taxes and Quotas To Make Them Less Market-Distorting," Working Papers 155284, International Agricultural Trade Research Consortium.
  • Handle: RePEc:ags:iatrwp:155284
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    File URL: http://purl.umn.edu/155284
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    References listed on IDEAS

    as
    1. Jane Korinek & Jeonghoi Kim, 2010. "Export Restrictions on Strategic Raw Materials and Their Impact on Trade," OECD Trade Policy Papers 95, OECD Publishing.
    2. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    3. William M. Liefert & Paul Westcott & John Wainio, 2012. "Alternative Policies to Agricultural Export Bans that are Less Market-Distorting," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 435-441.
    4. Trostle, Ronald, 2008. "Factors Contributing to Recent Increases in Food Commodity Prices (PowerPoint)," Seminars 43902, USDA Economists Group.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    trade policy; trade restrictions; export taxes; export quotas; export licenses; market power; Agricultural and Food Policy; International Relations/Trade; F13; O24; Q17;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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