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

Author

Listed:
  • Chengyan Yue
  • John C. 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 tariff-equivalent estimate to its determinants (substitution elasticity, preference for home good, trade cost, and to the reference data chosen). We use the approach to investigate the ongoing U.S.-Japan 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.

Suggested Citation

  • Chengyan Yue & John C. Beghin & Helen H. Jensen, 2005. "Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs," Center for Agricultural and Rural Development (CARD) Publications 05-wp383, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:05-wp383
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    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; Animal Welfare Policy

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