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Imperfect Competition, State Trading and Japan's Imports of Rice


  • Donald MacLaren


In the negotiations on agriculture in the World Trade Organization, itwas asserted that an importing state trading enterprise affects the domestic market but not the international market. This claim is investigated through specifying a model of intermediaries in international trade. There are two kinds of intermediaries: first, a state trading enterprise; and second, an n-firm Cournot oligopsony/oligopoly that acts as the counterfactual. Using Japanese market priceand quantity data for rice, and elasticity parameters drawn from the literature,the equations of the model are calibrated to these data and parameters. The resulting equations then permit the calculation of the tariff equivalence of the state trading enterprise under different assumptions about market structure, as wellas the welfare effects associated with them. The equations are re-specified to model the existing import regime for rice, which is a tariff quota. The conclusions are: first, that, compared with the counterfactual, an importing state trading enterprise acts like a tariff by restricting imports; and second, the currentimport regime of a tariff quota causes a welfare loss compared with the counterfactual.

Suggested Citation

  • Donald MacLaren, 2011. "Imperfect Competition, State Trading and Japan's Imports of Rice," ISER Discussion Paper 0806, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0806

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    References listed on IDEAS

    1. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    2. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-318, May.
    3. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    4. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
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