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

Published online by Cambridge University Press:  15 September 2016

Devry S. Boughner ,
Harry de Gorter  and
Ian M. Sheldon
Devry S. Boughner
Affiliation:
Agricultural Crops Branch, Agriculture and Forest Products Division of the U.S. International Trade Commission (USITC) in Washington, D.C.
Harry de Gorter
Affiliation:
Department of Agricultural, Resource, and Managerial Economics at Cornell University
Ian M. Sheldon
Affiliation:
Department of Agricultural, Environmental, and Development Economics at The Ohio State University
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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.

Type
Issues in the Administration of Tariff-Rate Import Quotas in the Agreement on Agriculture in the WTO
Information
Agricultural and Resource Economics Review , Volume 29 , Issue 1 , April 2000 , pp. 58 - 69
Copyright
Copyright © 2000 Northeastern Agricultural and Resource Economics Association 

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