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GTAP Resources: Resource Display

GTAP Resource #1395

"The effective rate of protection of European agrifood sector"
by Antimiani, Alessandro, Piero Conforti and Luca Salvatici


Abstract
Developing countries often complain that tariffs tend to be higher on processed products than on primary commodities. Besides, as it is known, the Common Agricultural Policy (CAP) is still based on border measures and direct income transfers aimed at modifying returns to productive factors. One commonly used measure gauging the effects of border policies is the effective protection rate (ERP), that is, the protection expressed in terms of the value added rather than the final price of a given product.
In this paper we use the index of effective protection introduced by J. Anderson (“Effective protection redux”, Journal of International Economics, 44-2, 1998). Namely, in his words “the effective rate of protection for sector j is defined as the uniform tariff which is equivalent to the actual differentiated tariff structure in its effect on the rents to residual claimants in sector j”. Thus the new concept introduced by Anderson gives a more accurate meaning to the idea of sectors benefiting from a higher or lower degree of protection.
In order to compute the index, we use the Applied General Equilibrium model provided by the Global Trade Analysis Project (GTAP). More specifically, we use the Version 5 database, which is based on year 1997, in order to compute the effective rate of protection we update, for the EU, the base data to 2003, implementing the Agenda2000 reform and updating some macroeconomic variables.
The outline of the paper is as follows: in the first part we present the new index of effective protection; then, we describe the GTAP model and database used for the calculation of the index and, finally, we analyze the results obtained, comparing the old a new index.



Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Not published
By/In: working per n.20, INEA
Date: 2003
Version:
Created: Antimiani, A. (1/12/2004)
Updated: Dimaranan, B. (1/13/2004)
Visits: 2,325
- Agricultural policies
- Europe (Western)


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