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GTAP Resource #1064

"A Re-evaluation of Tariffs Facing Exporters of Processed Food: Implications for Trade Liberalization oa"
by Gehlhar, Mark

One characteristic of food and agricultural sectors is the wide range of tariff rates found across individual products and importers. This is particularly true of processed food where there can be major differences in tariff rates even within the same sector and country. This is documented by Gibson, Wainio, Whitley,and Bohman (2001) where they examine tariff profiles of food importers in the world.

High tariffs on heavily traded products are of keen interest for exporters in future trade negotiations. The relative importance of these tariffs for individual exporters is not revealed in an aggregate database such as the GTAP database. For example, both the United States and France face a tariff of 121% for the aggregate tobacco products and beverage sector in the Middle East region. But this reflects the way the database was constructed using simple averages of the applied rates. There is a much higher tariff rate applied to beverages than for tobacco products in the Middle East region. France's exports 25 times more beverages than tobacco products while the United States exports 5 times more tobacco products than beverages. Thus it would seem that for the aggregate sector the French exporters would face a relatively higher level of protection on their products than the United States. There are a number of examples similar to this one with wide variations in tariffs falling within the same sector. In other processed food sector Japan applies a low tariff on dried fruit (1-3%) but a very large rate for frozen vegetables (75-100%).

The purpose of this paper is to perform an analysis of tariff reductions using a reconstructed tariff data set for the processed food sectors. Rather than using a simple average, tariffs are aggregated using each exporters trade weights with the world. It is argued that this approach better reflects the relevant tariffs facing each exporter. This in effect changes the average tariff rate faced by each exporter, due to differences in the composition of its trade with the world.

The raw data inputs for this exercise are the same as those used to construct the GTAP database. The Agricultural Market Access Database (AMAD) is used for detailed tariffs. Trade data is from the United Nations COMTRADE database. This data is available at the detailed commodity level using the 6-digit Harmonized System of classification (HS). Import tariff rates are altered using the ALTERTAX program provided in the GEMPACK software suit.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2002 Conference Paper
Status: Published
By/In: Presented at the 5th Annual Conference on Global Economic Analysis, Taipei, Taiwan
Date: 2002
Created: (4/30/2002)
Updated: Bacou, M. (7/16/2002)
Visits: 3,870
- Agricultural policies

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