The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade

Chengyan Yue and John Beghin ()

No 7351, Working Papers from Iowa State University, Department of Economics

Abstract: We derive a method to econometrically estimate the tariff equivalent and foregone trade effects of a prohibitive technical barrier to trade (TBT) based on Wales and Woodland’s Kuhn-Tucker approach to corner solutions in consumer choice. The method overcomes the lack of observed data on bilateral trade flows and accounts for differentiated goods by place of origin. We apply the derived random utility model to international trade in apples to identify the tariff equivalent of prohibitive nontariff trade barriers imposed by Australia on potential imports of New Zealand apples. We estimate the forgone apple trade between the two countries, the implied trade injury imposed by Australia on New Zealand, and the welfare loss to Australia. The removal of the TBTs would induce net welfare gains around US$50 million annually for Australia.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 31
Date: 2007-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://ageconsearch.umn.edu/record/7351/files/wp070027.pdf (application/pdf)

Related works:
Chapter: TARIFF EQUIVALENT AND FORGONE TRADE EFFECTS OF PROHIBITIVE TECHNICAL BARRIERS TO TRADE (2017)
Journal Article: Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2009)
Working Paper: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2007)
Working Paper: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:genres:7351

DOI: 10.22004/ag.econ.7351

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