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Trade and Welfare Impacts of Partial Liberalization of U.S. Sugar TRQs: The Application of a PE/GE Modeling Approach

Birgit Meade (), Jason Grant () and Anita Regmi

No 61657, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: The sugar sector is one of the most heavily protected commodities in agriculture using a system of tariff rate quotas (TRQs) with a complex set of administration procedures. General equilibrium models are not suitable to analyze trade liberalization scenarios that involve numerous tariff-rate quotas across narrowly defined product lines. We use the Rutherford/Grant/Hertel modeling approach by embedding a detailed, partial equilibrium (PE) model into a standard, global general equilibrium (GE) framework. We use this PE/GE model to compare trade and welfare outcomes of two liberalization scenarios: Increasing quota levels by 25% and cutting over tariffs by 50%, versus increasing quota levels by 50% and cutting over-quota tariffs by 25%. We find that lowering over-quota tariffs relatively more has more positive welfare effects than increasing quota levels relatively more.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 31
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61657

DOI: 10.22004/ag.econ.61657

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