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

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  • 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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    References listed on IDEAS

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    5. Linda Calvin & Barry Krissoff & William Foster, 2008. "Measuring the Costs and Trade Effects of Phytosanitary Protocols: A U.S.–Japanese Apple Example," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 120-135.
    6. John C. Beghin & Jean-Christophe Bureau, 2017. "Quantitative Policy Analysis Of Sanitary, Phytosanitary And Technical Barriers To Trade," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 3, pages 39-62, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    apple trade; Japan; price wedge; sanitary and phytosanitary (SPS); tariff equivalent; technical barriers to trade (TBT); trade cost; trade dispute.;
    All these keywords.

    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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