Corn trade simulations of China: reduction in tariffs versus expansion in tariff-rate quotas

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kai Liu ◽  
Masato Yamazaki ◽  
Atsushi Koike ◽  
Yueying Mu
Keyword(s):  
Comparative Advantage ◽  
Computable General Equilibrium ◽  
Supply And Demand ◽  
Tariff Rate ◽  
Policy Implications ◽  
Trade Restrictions ◽  
Domestic Production ◽  
Content Type ◽  
Tariff Rate Quotas ◽  
Self Sufficiency

PurposeCorn, which has the highest domestic production, planting area and consumption, is the top cereal in relation to demand and supply in China. However, the comparative advantage of China in corn has continuously deteriorated in recent years and based on the recent situation and possible supply and demand trends, it is widely accepted that a corn self-sufficiency rate of 95% is difficult to achieve. Under current import-restriction policies, corn may stand at the crossroads of reforms to solve its predicted insufficient supply. In this study, the authors analyse the necessity of relaxing trade restrictions on corn in China and explore the effects of trade restrictions by reducing tariffs and expanding tariff-rate quotas on corn and related industries and the welfare change caused by possible relaxations.Design/methodology/approachThe authors construct a computable general equilibrium (CGE) model and design nine scenarios for the analysis.FindingsThe results show that relaxations of import restrictions are probable methods to meet the aim of sufficient corn supply during shortages. They are simulated to reduce corn's domestic production and price, increase import and import prices and lead to a decline in self-sufficiency but benefit the production of corn-related industries of corn. The results also imply that expanding the quota is a better method for releasing trade restrictions in China.Originality/valueThe comparative advantage of China in corn deteriorated with an increase in prices. Based on the current situation and possible trends of supply and demand, the referenced goal of achieving 95% corn self-sufficiency appears difficult, implying that reliance on imports is probably imminent and vital. This study provides simulation results in future scenarios and offers policy implications for China's corn trade policies.

Canada-U.S. softwood lumber dispute: background.

2021 ◽  
pp. 10-26
Author(s):  
G. Cornelis van Kooten ◽  
Harry Nelson ◽  
Fatemeh Mokhtarzadeh
Keyword(s):  
Supply And Demand ◽  
Tariff Rate ◽  
Gains From Trade ◽  
Excess Supply ◽  
Demand Functions ◽  
Softwood Lumber ◽  
Modeling Approaches ◽  
Tariff Rate Quotas ◽  
Export Taxes ◽  
History Of

Abstract In this chapter, we examine the importance of softwood lumber production to Canada's economy and provide a brief history of the Canada-U.S. softwood lumber dispute and its resolution on various occasions using U.S. countervailing and anti-dumping duties, export taxes or various types of quota regimes, including tariff rate quotas. The construction of excess supply and demand functions is explained, as are the gains from trade. This helps inform the modeling approaches that are identified in later chapters.

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alisha Mahajan ◽  
Kakali Majumdar
Keyword(s):  
Environmental Policy ◽  
Comparative Advantage ◽  
Export Performance ◽  
Environmental Policies ◽  
Policy Implications ◽  
Global Trade ◽  
Porter Hypothesis ◽  
Content Type ◽  
Long Run ◽  
Environmentally Sensitive

PurposeTextile, listed as one of the highly environmentally sensitive goods, its trade is susceptible to be influenced by the implementation of stringent environmental policies. This paper aims to investigate the long-run relationship between revealed comparative advantage (RCA) and Environmental Policy Stringency Index (EPSI) for textile exports of G20 countries in panel data setup.Design/methodology/approachApart from trend analysis, the authors have employed Pedroni and Westerlund panel cointegration method and fully modified ordinary least square (FMOLS) method to study the long-run relationship between RCA and EPSI in presence of cross-sectional dependence.FindingsA strong link between trade and environmental stringency is observed for textile in the present study. For G20 countries, slight evidence of the Pollution Haven Hypothesis has also been witnessed in the study. Correspondingly, the results reveal the presence of long-run association between the variables under study, implying that stringent environmental policies reduce RCA for some countries, whereas some countries witness the Porter hypothesis.Research limitations/implicationsThe results imply that policy formulation should not aim at limiting the efforts of connecting RCA to environmental stringency but to set trade policies in a wider framework, considering environmental concerns, as these are inseparable subjects. However, this study also provides relevant real-world implications that can support further research.Practical implicationsThe present study has important implications for textile exporters such as green innovations. The Porter hypothesis can be a beneficial tool for G20 exporters in enhancing their export performance, especially for the ones dealing in environmentally sensitive goods. This study offers relevant policy implications and provides directions for future research on global trade and environment nexus.Originality/valueThis study deals in a debatable area of research that evaluates the interlinkages between environmental stringency and global trade flows in the G20 countries. An important observation of the study is the asymmetrical nature of policy stringency across different countries and its impact on trade. The unavailability of updated data is the limitation of the present study.

Canada-U.S. softwood lumber dispute: background.

2021 ◽  
pp. 10-26
Author(s):  
G. Cornelis van Kooten ◽  
Harry Nelson ◽  
Fatemeh Mokhtarzadeh
Keyword(s):  
Supply And Demand ◽  
Tariff Rate ◽  
Gains From Trade ◽  
Excess Supply ◽  
Demand Functions ◽  
Softwood Lumber ◽  
Modeling Approaches ◽  
Tariff Rate Quotas ◽  
Export Taxes ◽  
History Of

Abstract In this chapter, we examine the importance of softwood lumber production to Canada's economy and provide a brief history of the Canada-U.S. softwood lumber dispute and its resolution on various occasions using U.S. countervailing and anti-dumping duties, export taxes or various types of quota regimes, including tariff rate quotas. The construction of excess supply and demand functions is explained, as are the gains from trade. This helps inform the modeling approaches that are identified in later chapters.

Trade performance and revealed comparative advantage of Indian pharmaceutical industry in new IPR regime

2015 ◽  
Vol 9 (1) ◽  
pp. 56-73 ◽  
Author(s):  
Varun Mahajan ◽  
D.K. Nauriyal ◽  
S P. Singh
Keyword(s):  
Pharmaceutical Industry ◽  
Multinational Corporations ◽  
Comparative Advantage ◽  
Generic Drugs ◽  
Global Market ◽  
Policy Implications ◽  
Revealed Comparative Advantage ◽  
Content Type ◽  
Trade Performance ◽  
Indian Pharmaceutical Industry

Purpose – The purpose of this paper is to examine the trade performance, revealed comparative advantage and trade specialisation indices of Indian pharmaceutical in the post-modified Indian Patent Act. Design/methodology/approach – The main data sources for this paper are United Nations Conference on Trade and Development, PROWESS of Centre for Monitoring Indian Economy, Government of India reports and Reserve Bank of India databases. Revealed comparative advantage index (RCAI) and trade specialisation coefficient (TSC) have been calculated in the study. Findings – India is ranked third in regard of TCS, far behind Ireland and Israel. While Ireland has moved up the value chain faster after 1995, Israel has moved up swiftly after 2000 through global production network and supply chain. The Indian pharmaceutical industry, on the other hand, has largely capitalised on its low-cost production of generic drugs and a large domestic market. The RCAI also supports the results of TSC. India is positioned at 11th place, far behind Ireland, which stands tall at the top with distantly followed by Israel, Switzerland, Belgium, the UK, etc. Practical implications – The study shows the policy implications for future sustainable development of the industry as the new IPR regime has given opportunities as well as threats to both domestic pharmaceutical companies as well as the multinational corporations. The Indian pharmaceutical industry can be a good learning experience for other developing countries hopeful to enter the global market for generic drugs. Originality/value – There are no major studies providing detailed analyses of India’s comparative advantage vis-à-vis other leading exporters of pharmaceutical products in the world. This study endeavours to fill this gap. It also attempts to capture recent trends in exports and imports during the global recession period.

scholarly journals U.S. TRQs for Peanuts, Sugar, and Tobacco: Historical Allocation and Nondiscrimination

2000 ◽  
Vol 29 (1) ◽  
pp. 81-90 ◽  
Author(s):  
David Skully
Keyword(s):  
Law Enforcement ◽  
Market Share ◽  
Comparative Advantage ◽  
Pareto Optimization ◽  
Tariff Rate ◽  
Tariff Rate Quotas ◽  
The Law ◽  
The Difference ◽  
Tariff Equivalent

U.S. peanut, sugar, and tobacco tariff rate quotas (TRQs) are allocated to suppliers on an historical market share basis. Once allocated they become difficult to redistribute to accommodate changes in comparative advantage among suppliers. The distribution of trade departs increasingly from the tariff-equivalent distribution advocated by the WTO principle of nondiscrimination. Article ΧIII of the GATT regarding the rules for historical allocation is examined and applied to four cases of historical allocation: domestic tobacco quota and TRQs for peanuts, sugar and tobacco. The difference between the law enforcement objective of the WTO and the Pareto optimization objective assumed by economists is stressed throughout.

Competitiveness analysis of Egyptian cotton exports with special focus on the Chinese market

2014 ◽  
Vol 6 (2) ◽  
pp. 248-263 ◽  
Author(s):  
Assem Abu Hatab ◽  
Eirik Romstad
Keyword(s):  
Comparative Advantage ◽  
Import Demand ◽  
Policy Implications ◽  
Parameter Estimates ◽  
Special Focus ◽  
Chinese Market ◽  
Content Type ◽  
Relative Prices ◽  
Export Prices ◽  
Egyptian Cotton

Purpose – The expected growth of China's cotton imports along with Egypt's quest for penetrating new cotton importing markets have together attracted the authors to investigate the competitiveness and the demand for Egyptian cotton in the Chinese market in order to capture the emerging opportunities that Egypt could gain from such a growing market. The paper aims to discuss these issues Design/methodology/approach – The paper employs Balassa's index of revealed comparative advantage and Vollrath's indices of revealed competitive advantage in order to measure the competitiveness of Egyptian cotton exports. An Almost Ideal Demand System (AIDS) approach was then used to estimate demand parameters for Chinese cotton imports from Egypt and major supply sources during the period 1992-2011. Findings – Results show that Egypt has experienced dramatic declines in its cotton comparative advantage over the analyzed period. The estimation results of the AIDS model indicate that Egypt's market share is positively affected by both own and US export prices, but negatively influenced by export prices of other competitors in the Chinese market. Results also indicate that Egyptian cotton is substitutable for cotton imports from all other regions, especially for US cotton. Moreover, additional Chinese expenditure on cotton imports would favor other suppliers. Finally, demand for Egyptian cotton was found to be more sensitive to price changes and there is a greater tendency for China to switch to Egyptian cotton than the other way around should relative prices change. Originality/value – This paper is original and novel in that; despite numerous studies have been done on China's demand for cotton and the several studies have been carried out on export and marketing of Egypt's cotton, the issue of cotton trade between Egypt and China has rarely been empirically examined. Furthermore, our results update important parameter estimates, particularly import demand elasticities of cotton. For Egypt, the study provides useful policy implications that could help policy makers to improve informed decision making with regard topromoting cotton exports to the Chinese market. For China, the study helps understanding the interrelationship between the Chinese cotton market and other emerging exporting markets, while focusing on the Egyptian market.

Ascertaining the competitiveness of Thai exports to PRC

2017 ◽  
Vol 27 (3) ◽  
pp. 275-299 ◽  
Author(s):  
Pornlapas Suwannarat
Keyword(s):  
Comparative Advantage ◽  
Cost Effective ◽  
Policy Implications ◽  
Chinese Market ◽  
Growth Trend ◽  
Data Set ◽  
Content Type ◽  
Republic Of China ◽  
Chinese Business

Purpose This study aims to fundamentally focus on the comparative advantage measurement and the trend of change in the international competitiveness of five Thai economic products exporting to the People’s Republic of China during the first half of the 2010s via the analysis of the revealed comparative advantage (RCA) index and market share. Design/methodology/approach The RCA index has been computed to show the comparative advantages of the product to a certain extent: whether it is cost-effective to produce that product in a certain location compared to opportunity cost of the resources in producing that product. The data set of number and value of five important export products from Thailand to China during 2010-2013 has been obtained from the Thai Ministry of Commerce and Thai-Chinese Business Information Centre. Findings The study reveals that of these five important economic products, cassava has the highest comparative advantage and continues to have a rapid growth trend, whilst computer equipment and components have been shown to have comparative disadvantage and the lowest comparative advantage index scores. Research limitations/implications Measuring with various sophisticated indices may provide clearer results. Also, according to unavailability of data set, the four-year period may not be able to show the long-term trend of competitiveness. Future studies are encouraged to study in the longer-term period with numerous indices. Practical implications The research also provides policy implications and measures to develop each sector to enhance competitiveness. Originality/value This is the original attempt to use both indices to assess the competitiveness of important Thai exports to the Chinese market.

International trade and food security: conceptual discussion, WTO and the case of China

2016 ◽  
Vol 8 (3) ◽  
pp. 399-411 ◽  
Author(s):  
Yu Zhu
Keyword(s):  
Developing Countries ◽  
International Trade ◽  
Food Security ◽  
Market Access ◽  
Two Dimensions ◽  
Policy Implications ◽  
Content Type ◽  
Self Sufficiency ◽  
Food Imports ◽  
Domestic Support

Purpose The purpose of this paper is to discuss the concept and measurements of food security under the framework of The Food and Agriculture Organization of the United Nations, explores the link between international trade and food security with an empirical investigation into the case of China, and draw policy implications in the context of WTO. Design/methodology/approach This paper elaborates the theoretical interconnection between food security and international trade and then utilize an autoregressive distributed lag model to investigate how/whether trade affects food security in China from two dimensions. Findings The authors find that international trade indeed leads China to increase its dependence on food imports, namely, it negatively affects the food security in China. Owing to the importance of food security under multilateral trade system, this paper then briefly analyzes two relevant topics of Doha Round negotiation, i.e. public stockholding for food security and special safeguard measures. It is proposed that WTO members should support the food self-sufficiency endeavors of developing countries and appropriately exempt them from rigid discipline of domestic support and market access. Originality/value This paper discusses the interaction of international trade and food security in various aspects. Empirical study shows that increasing dependence on food imports will negatively impact the food security of China. It is concluded that WTO members should support the food self-sufficiency endeavors of developing countries and appropriately exempt them from rigid discipline of domestic support and market access.

scholarly journals China – Tariff Rate Quotas for Certain Agricultural Products: Against the Grain: Can the WTO Open Chinese Markets? A Contaminated Experiment

2021 ◽  
pp. 1-16
Author(s):  
Joseph Glauber ◽  
Simon Lester
Keyword(s):  
Bilateral Trade ◽  
The United States ◽  
Legal Aspects ◽  
Tariff Rate ◽  
Economic Interests ◽  
Trade Relations ◽  
Tariff Rate Quotas ◽  
International Obligations ◽  
Trade Relationship ◽  
Key Issues

Abstract The US complaint about Chinese tariff-rate quotas (TRQs) on certain grain products helps illustrate several key issues in US–China trade relations and the effectiveness of WTO disputes. First, do international obligations based on transparency and fairness work in relation to an authoritarian country not known for the rule of law domestically? Second, can there be a disconnect between the legal aspects of a dispute and the underlying economic interests, with a DSB ruling sometimes not leading to improved trade flows? And third, given the bilateral trade war and ‘phase one’ trade deal between the United States and China, has the WTO been superseded in this trade relationship? This paper summarizes the facts and law of the China–TRQs dispute, and examines each of these questions in that context.

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