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How does tariff-rate quota modelling affect CGE results? An application for MIRAGE

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  • Decreux, Yvan
  • Ramos, Maria Priscila

Abstract

Since the Uruguay Round Agricultural Agreement (URAA) entered into force in 1994, tariff-rate quotas (TRQs) have become the most widely used trade policy instrument to improve agricultural market access while at the same time controlling import volumes. Until now, the MIRAGE CGE model only takes into account the exogenous quota rents (MAcMap-HS6 database) allocated entirely to exporters. Unfortunately, this methodology does not authorise any regime when trade policy changes (e.g. a quota-volume increase for very sensitive agricultural products or a tariff reduction). In order to improve the treatment of TRQs in MIRAGE we model them as bilateral TRQs at the HS6 level using MAcMapHS6-v2 database. Assuming a simple scenario of bilateral trade agreement between the European Union and Mercosur, we test the previous TRQ modeling and we compare its results to the present version of MIRAGE (aggregation biases and TRQ modeling). The macroeconomic and trade results give us an idea of the biases introduced by the negligence of TRQ modeling.

Suggested Citation

  • Decreux, Yvan & Ramos, Maria Priscila, 2007. "How does tariff-rate quota modelling affect CGE results? An application for MIRAGE," Working Papers 7206, TRADEAG - Agricultural Trade Agreements.
    • Handle: RePEc:ags:tragwp:7206
    DOI: 10.22004/ag.econ.7206
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    Cited by:

    1. Yvan Decreux & Lionel Fontagné, 2014. "What next for the DDA? Quantifying the role of negotiation modalities," RSCAS Working Papers 2014/61, European University Institute.
    2. Decreux, Yvan & Fontagné, Lionel, 2011. "Economic Impact of Potential Outcome of the DDA," Conference papers 332090, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Yvan Decreux & Lionel Fontagné, 2013. "What Did Happen in the DDA? Quantifying the Role of Negotiation Modalities," Working Papers 2013-38, CEPII research center.
    4. Bchir, Mohamed Hedi & Chemingui, Mohamed Abdelbasset & Karingi, Stephen, 2008. "The Impact of Multilateral Trade Liberalization on Poverty in Kenya: A Multiple Linked Top-Down Approach," Conference papers 331784, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Himics, Mihaly & Listorti, Giulia & Tonini, Axel, 2020. "Simulated economic impacts in applied trade modelling: A comparison of tariff aggregation approaches," Economic Modelling, Elsevier, vol. 87(C), pages 344-357.
    6. Decreux, Yvan & Fontagné, Lionel, 2015. "What Next for Multilateral Trade Talks? Quantifying the Role of Negotiation Modalities," World Trade Review, Cambridge University Press, vol. 14(1), pages 29-43, January.
    7. Ngavozafy, Antonia & Latorre, María C., 2021. "New EU-MERCOSUR Association Agreement: Quantitative Assessment of its Impacts on Global Trade in Agricultural Commodities," Conference papers 333294, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Ngavozafy, Antonia & Suarez-Cuesta, David & Latorre, María C., 2022. "New EU-MERCOSUR Association Agreement: Quantitative Impact Assessment of the Liberalization through Tariff Rate Quotas," Conference papers 333466, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Jafari, Yaghoob & Britz, Wolfgang & Guimbard, Houssein & Beckman, Jayson, 2021. "Properly capturing tariff rate quotas for trade policy analysis in computable general equilibrium models," Economic Modelling, Elsevier, vol. 104(C).
    10. Chiedza L. Muchopa, 2021. "Economic Impact of Tariff Rate Quotas and Underfilling: The Case of Canned Fruit Exports from South Africa to the EU," Economies, MDPI, vol. 9(4), pages 1-17, October.

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