Potential trade distortion effects of state trading enterprises under the tariff-rate quota scheme

Jung-Hyun Yoon and Song Soo Lim

No 2013-22, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The paper analyzes the potential trade distortion effects of state trading enterprises (STEs) on soybean imports to Korea. Traditionally, STEs have exercised exclusive rights to import the so-called strategic products, to ensure food security, domestic price stabilization, and import mark-ups. However, STE imports have been criticized on the grounds that industries using soybeans as a raw material are unable to obtain a diverse mix of quality material and cannot exercise the right to choose their own ingredients. Under a theoretical framework, a tariff equivalent of the STE is postulated to equate imports by private firms with imports by the STE. An empirical model is constructed and estimated using annual data spanning 1980-2009. The estimated results show that providing exclusive rights to imports has a negative effect on market access. When the STE pursues consumer welfare, the import-reducing effect turns out to be smaller than that in the producer welfare maximization case.

Keywords: state trading enterprises; tariff-rate quotas; tariff equivalents; soybeans; sensitive products (search for similar items in EconPapers)
JEL-codes: F11 F13 Q17 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/70478/1/737928530.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201322

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