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Production Subsidy and Countervailing Duties in Vertically Related Markets: The Hog-Pork Case Between Canada and the United States

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Abstract

This paper analyzes U.S. countervailing import duties aimed at offsetting the effects of a Canadian hog production subsidy. Approximate countervailing duty formulae for two alternative objectives are derived, the permissible range of these duties is illustrated, and empirical evidence is provided. To restore equilibrium at the pre-subsidy level in the U.S. hog market, a countervailing duty on hog imports suffices; this duty should be less than the unit hog production subsidy. To restore equilibrium in both the U.S. hog and pork markets, countervailing duties in both hog and pork imports is required. Such duties should be less than the unit subsidy, and the duty on pork should be less than the duty on hogs.

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  • GianCarlo Moschini & Karl D. Meilke, 1992. "Production Subsidy and Countervailing Duties in Vertically Related Markets: The Hog-Pork Case Between Canada and the United States," Center for Agricultural and Rural Development (CARD) Publications 91-gatt6, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:91-gatt6
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    1. Weerahewa, Jeevika & Meilke, Karl D. & Le Roy, Danny G., 2008. "An Economic Assessment of the BSE Crisis in Canada: Impact of Border Closure and BSE Recovery Programs," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 9(1).
    2. James Rude & Yves Surry, 2014. "Canadian Hog Supply Response: A Provincial Level Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 149-169, June.
    3. Amponsah, William A. & Qin, Xiang Dong, 2001. "Management Perspectives On The Impacts Of Nafta On The U.S. Textile And Apparel Industries," 2001 Annual meeting, August 5-8, Chicago, IL 20733, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Meilke, Karl D. & Sarker, Rakhal, 1995. "National Administered Protection Agencies: Their Role in the Post-Uruguay Round World," 1995: Understanding Technical Barriers to Agricultural Trade Conference, December 1995, Tucson, Arizona 50714, International Agricultural Trade Research Consortium.
    5. Buhr, Brian L. & Kim, Hanho, 1997. "Dynamic adjustment in the US beef market with imports," Agricultural Economics, Blackwell, vol. 17(1), pages 21-34, October.
    6. Meilke, Karl D. & Sarker, Rakhal, 1997. "Four case studies of agri-food CVDs and a proposal for reforming national administered protection agencies," Agricultural Economics, Blackwell, vol. 17(2-3), pages 147-164, December.
    7. Meilke, Karl D. & Rude, James & Zahniser, Steven, 2006. "The Search for "NAFTA Plus"," 2006 NAAMIC Workshop III: Achieving NAFTA Plus 163881, North American Agrifood Market Integration Consortium (NAAMIC).
    8. Sarker, Rakhal & Ratnesena, Shashini, 2014. "Revealed Comparative Advantage and Half-A-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef and Pork Sectors," Working Papers 165675, Canadian Agricultural Trade Policy Research Network.
    9. Burfisher, Mary E. & Norman, Terry & Schwartz, Renee, 2001. "Nafta Trade Dispute Resolution: What Are The Mechanisms?," Trade Liberalization Under NAFTA: Report Card on Agriculture; Proceedings of the 6th Agricultural and Food Policy Systems Information Workshop -2000 16843, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    10. John Wainio & Linda M. Young & Karl Meilke, 2003. "Trade Remedy Actions in NAFTA: Agriculture and Agri-Food Industries," The World Economy, Wiley Blackwell, vol. 26(7), pages 1041-1065, July.
    11. Larue Bruno & Tanguay Luc, 1999. "Regional Price Dynamics and Countervailing Duties: Did the Canada-U.S. Hog/Pork Dispute Have a Permanent Impact?," International Economic Journal, Taylor & Francis Journals, vol. 13(1), pages 81-101.
    12. Sckokai, Paolo, 2001. "The Common Agricultural Policy In Econometric Models," Working Papers 14800, National Institute of Agricultural Economics, Italy INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    13. Buhr, Brian L. & Kim, Hanho, 1997. "Dynamic adjustment in the US beef market with imports," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 17(1), October.

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