 Properly capturing tariff rate quotas for trade policy analysis in computable general equilibrium modelsYaghoob Jafari, Wolfgang Britz, Houssein Guimbard and Jayson Beckman Economic Modelling, 2021, vol. 104, issue C Abstract: Computable general equilibrium (CGE) models are generally used to conduct trade policy analysis; however, given the complexity in data collection and modeling, tariff rate quotas (TRQs) are often simplified in these models. However, TRQs are crucial for trade negotiations because they are rarely completely liberalized and often the obstacles to negotiations. We propose an approach to model TRQs explicitly and at the product level within CGE models and compare with previous approaches that considered an explicit (or implicit) representation at the tariff line or sector level. Using the Canada–EU trade agreement as an example, we find significant aggregation bias if TRQ shocks are implemented at the aggregate sectoral level. This bias is only partially eliminated if TRQs are implicitly represented by ad-valorem equivalents at the tariff line. Our findings suggest the need to represent TRQs explicitly at the relevant commodity detail in trade impact assessments. Keywords: Free trade agreements; CETA explicit and implicit modeling of TRQs; Tariff line analysis; Computable general equilibrium (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:104:y:2021:i:c:s0264999321002091 DOI: 10.1016/j.econmod.2021.105620 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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