GTAP Resources: Resource Display
| GTAP Resource #2684 |
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"The Non-MFN Effects of MFN Specific Tariffs" by Chowdhury, Sohini Abstract This paper explores the sources, extent and two consequences of the non-MFN effects of US MFN specific tariffs, which follow from the cross-exporter variation in f.o.b prices within a commodity. The first consequence is the bias against developing countries, given that developing countries export low quality and hence low priced varieties (Schott, 2004). This is measured as the additional loss in imports faced by all developing countries exporting to the US, from US MFN specific tariffs as opposed to from the trade equivalent mean AVE MFN advalorem tariffs. My results, using the Anderson-Neary Mercantilist Trade Restrictiveness Index (MTRI) suggest that doubling per capita GDP reduces AVEs by 14%. This is equivalent to an additional import loss of 5-8% or 60-80 million dollars, from the group of 120 developing countries exporting to the US, generated by US MFN specific tariffs. This value is as high as 15-24%, equivalent to 13-20 million dollars for a subsample of the 48 low income countries which export to the US. Throughout my paper; ‘%’denotes percentage, and not percentage points. The other consequence of the Non-MFN effects of MFN specific tariffs discussed in this paper is the additional deadweight losses (DWL) accruing to the US on account of US MFN specific tariffs. The basic idea here is that since the DWL is proportional to the squares of tariffs, the AVEs of MFN specific tariffs being non-MFN, have an additional cross-country level of variation associated with them inducing greater welfare losses. My results, obtained using the Anderson-Neary Trade Restrictiveness Index (TRI) suggest that levying MFN specific tariffs as opposed to a MFN advalorem tariffs equivalent to the trade weighted mean AVE, on imports entering the US, increases the US trade restrictiveness and DWL by an additional 6% and 12% respectively. My results are robust to five different specifications of unit values which control for measurement and reporting errors to various degrees. |
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- Agricultural policies - Asia (East) - Asia (Southeast) - Asia (South-Central) - Africa (Central) - Africa (East) - Africa (West) - Africa (Southern) - North America |
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Public Access  GTAP Resource 2684 (332.0 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
