Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs
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 TBT estimate to its key determinants (substitution elasticity, preference for home good, and trade cost). We use the augmented approach to investigate the ongoing US-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.
|Date of creation:||01 Nov 2005|
|Date of revision:|
|Publication status:||Published in American Journal of Agricultural Economics, November 2006, vol. 88, pp. 947-960|
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