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GTAP Resource #7209

"The medley of quotas between the EU and New Zealand (and how to model them in GTAP)"
by Döbeling, Tatjana

Tariff-rate quotas (TRQs) are a common instrument of tariff liberalization for the most sensitive commodities within free trade agreements, whereby their precise outcomes are important to policy assessments whenever a new regional trade agreement is concluded. The modelling of tariff-rate quotas in computable general equilibrium models however commonly runs into five major problems: Firstly, TRQs are usually defined at the tariff line level, with a much higher level of detail than most sectors. Secondly, one quota gives often access to more than one country or tariff line, whereby questions around the allocation of quota licenses arise. Thirdly, countries may have access to more than one quota for specific commodities, so the interaction effect of new quotas with pre-existing ones have to be considered. Fourthly, there is a medley of specific and ad valorem tariffs outside the quota, which act as an opportunity cost for going through the bureaucracy of obtaining a quota license. Rent seeking quota license applicants have different incentives to apply for a quota, depending on the tariff profile, the unit value of their commodity and the competition for quota licenses. And finally, real world data sometimes shows that quotas are underfilled, even if the commodities contained in it have a high market potential and may even be exported outside the quota, which is an indicator for high administration costs in the quota licensing process. With a module extension of the GTAP-based CGEbox, we aim at providing a module that considers these hurdles in TRQ analysis and present its results for the case of the recently concluded New Zealand EU trade agreement.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Created: Döbeling, T. (4/12/2024)
Updated: Döbeling, T. (5/29/2024)
Visits: 54
- Other data bases and data issues
- Non-Tariff barriers
- Preferential trading arrangements
- Model extension/development
- European Union
- Oceania

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