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The Economics of Two-Tier Tariff-Rate Import Quotas in Agriculture

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  • Boughner, Devry S.
  • de Gorter, Harry
  • Sheldon, Ian M.

Abstract

This paper analyzes the economics of two-tier tariff import quotas (TRQs) and implications of alternative trade liberalization scenarios. The Uruguay Round Agreement on Agriculture had tariffs replace nontariff barriers as the protective mechanism while quotas ensured minimum trade flows. Our framework isolates the effects of changes either in the second-tier tariff, and first-tier tariff, or the quota. We show how market conditions or relative policy instrument levels determine which tariff or quota affects trade and domestic and world prices. Whether or not exporting countries have been allocated export quotas and the procedures for the distribution of the rights to export and import also influences the efficiency of TRQs.

Suggested Citation

  • Boughner, Devry S. & de Gorter, Harry & Sheldon, Ian M., 2000. "The Economics of Two-Tier Tariff-Rate Import Quotas in Agriculture," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(1), pages 58-69, April.
    • Handle: RePEc:cup:agrerw:v:29:y:2000:i:01:p:58-69_00
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    References listed on IDEAS

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    1. Moschini, Giancarlo, 1991. "Economic issues in tariffication: an overview," Agricultural Economics, Blackwell, vol. 5(2), pages 101-120, June.
    2. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium.
    3. Ellen Hornig & Richard N. Boisvert & David Blandford, 1990. "Explaining The Distribution Of Quota Rents From Us Cheese Imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(1), pages 1-20, April.
    4. Spencer, Barbara J., 1997. "Quota licenses for imported capital equipment: Could bureaucrats ever do better than the market?," Journal of International Economics, Elsevier, vol. 43(1-2), pages 1-27, August.
    5. Anderson, James E, 1985. "The Relative Inefficiency of Quotas: The Cheese Case," American Economic Review, American Economic Association, vol. 75(1), pages 178-190, March.
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    1. Gouel, Christophe & Mitaritonna, Cristina & Ramos, Maria Priscila, 2011. "Sensitive products in the Doha negotiations: The case of European and Japanese market access," Economic Modelling, Elsevier, vol. 28(6), pages 2395-2403.
    2. John C. Beghin & Heidi Schweizer, 2021. "Agricultural Trade Costs," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 500-530, June.
    3. Joerin, Robert, 2014. "Improving Market Access: The Role Of Auctions In Converting Tariff-Rate Quotas Into Single Tariffs," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 17(1), March.
    4. Franziska Junker & Thomas Heckelei, 2012. "TRQ‐complications: who gets the benefits when the EU liberalizes Mercosur's access to the beef markets?," Agricultural Economics, International Association of Agricultural Economists, vol. 43(2), pages 215-231, March.
    5. Frank van Tongeren & John Beghin & Stéphane Marette, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," OECD Food, Agriculture and Fisheries Papers 21, OECD Publishing.
    6. repec:ags:aoeisl:170467 is not listed on IDEAS
    7. Garcia, Roberto J., 2003. "A Case Against The Simultaneous Use Of Market Access Restrictions, Domestic Support, And Export Subsidies," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25915, International Association of Agricultural Economists.
    8. Daria Loginova & Marco Portmann & Martin Huber, 2021. "Assessing the Effects of Seasonal Tariff‐rate Quotas on Vegetable Prices in Switzerland," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 607-627, June.
    9. Himics, Mihály & Britz, Wolfgang, 2016. "Flexible and welfare-consistent tariff aggregation over exporter regions," Economic Modelling, Elsevier, vol. 53(C), pages 375-387.
    10. Julien Gourdon & Alessandro Nicita, 2013. "A Preliminary Analysis On Newly Collected Data On Non-Tariff Measures," UNCTAD Blue Series Papers 53, United Nations Conference on Trade and Development.
    11. Blayney, Donald P. & Gehlhar, Mark J. & Bolling, H. Christine & Jones, Keithly G. & Langley, Suchada V. & Normile, Mary Anne & Somwaru, Agapi, 2006. "U.S. Dairy at a Global Crossroads," Economic Research Report 7209, United States Department of Agriculture, Economic Research Service.

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