Price equivalent tariffs and quotas under a domestic monopoly

Bruno Larue, Jean-Philippe Gervais () and Sebastien Pouliot

Journal of International Trade & Economic Development, 2008, vol. 17, issue 2, pages 311-322

Abstract: Price-equivalent import tariffs and quotas are compared when domestic production is controlled by a monopolist, say an agricultural marketing board with the power to restrict domestic supply, under endogenous terms of trade. Welfare comparisons boil down to sourcing costs comparisons. Quotas tend to dominate at high domestic prices, ad valorem tariffs at intermediate prices and specific tariffs at low domestic prices. Welfare maxima are achieved with more restrictive policies than under perfect competition. These results rationalize separate negotiations for sensitive products in the Doha Round and the setting of tariff-rate quotas that mimic import quotas for these products. Finally, in ascertaining the robustness of our policy ranking to the choice of variable anchoring the comparisons, we found that specific tariffs unambiguously dominate ad valorem tariffs and quotas when government revenue or imports anchor the comparisons. However, some quota revenues and import levels cannot be achieved with tariffs.

Keywords: agricultural trade; domestic monopoly; price-equivalence; quotas; tariffs; trade policy (search for similar items in EconPapers)
Date: 2008

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:taf:jitecd:v:17:y:2008:i:2:p:311-322

Ordering information: This journal article can be ordered from
http://www.tandf.co.uk/journals/subscription.html

Access Statistics for this article

Journal of International Trade & Economic Development is edited by Pasquale M. Sgro and Bharat R. Hazari

More articles in Journal of International Trade & Economic Development from Taylor and Francis Journals
Series data maintained by Christopher F. Baum ().