The The Equivalence of Tariffs and Quotas under a TariffâRate Quota System: A Case Study of Rice
2011
Chen, ChiâChung | Chang, ChingâCheng | McCarl, Bruce A.
This study examines the effect of tariffârate quota (TRQ) expansions as have emerged from the international trade negotiations that are designed to ensure market access for many sensitive agricultural products. We extend the existing models on tariff–quota equivalence to a TRQ system. Our theoretical finding indicates that the equivalence of domestic price between outâquota tariff reduction and quota expansion depends on domestic producer's behavior and on the values of conjectural variation. An empirical spatial equilibrium model of international rice trade is used to examine the price and welfare impacts of replacing quota expansions with tariff reductions.
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