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Example Significant US Import Restraints

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Significant tariffs and TRQs on food and agricultural products including canned ... ball and roller bearings; ceramic wall and floor tile; table and kitchenware; ... – PowerPoint PPT presentation

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Title: Example Significant US Import Restraints


1
Example Significant US Import Restraints
  • Used by USTR at WTO TPRM to demonstrate
    transparency re US import restrictions
  • Significant tariffs and TRQs on food and
    agricultural products including canned tuna,
    cotton, dairy products, peanuts, sugar and
    sugar-containing products, tobacco and tobacco
    products, beef, and ethyl alcohol
  • Significant tariffs as well as quotas on certain
    textiles and apparel pursuant to the Uruguay
    Round Agreement on Textiles and Clothing (ATC)
    and bilateral textile agreements with non-WTO
    member countries
  • Significant tariffs for a number of merchandise
    goods, including footwear and leather products
    glass and glass products watches, clocks, watch
    cases and parts ball and roller bearings
    ceramic wall and floor tile table and
    kitchenware costume jewelry pens, mechanical
    pencils, and parts and cutlery and hand tools.
  • For 45 Input-Output industries we have calculated
    the percentage by which import restraints raise
    landed-duty-paid price.
  • These percentages, which we refer to as wedges,
    are divided into two parts
  • The first part is a tariff equivalent paid by
    importers, and
  • The second part is the increase in the price
    received by foreign suppliers made possible by
    US-imposed quotas. This second part is often
    referred to as the export tax equivalent of the
    US quota regime .

2
Estimated price gap
Price
US import tariff equivalent
SROW with export tax
DUSA with import tariff
DUSA
PD
SROW
PM
ROW export tax equivalent
Quantity of US imports
Q
0
3
Significant US import restraintsPrice gaps, US
tariff equivalents, ROW export tax equivalent
4
Removal of significant US import restraintsPrice
gaps and US output effects
5
USAGE-ITC import effect
  • For understanding the size of the import effect
    we begin with a version of the import-demand
    equation of a typical agent in USAGE-ITC
  • xm z - ? ? Sd ? (1-Smarg) ? (pm - pd)
  • where
  • xm is the percentage change in the agents demand
    for the imported variety of a commodity
  • pm and pd are the percentage changes in the
    basic prices of the imported and domestically
    produced varieties of the commodity (basic prices
    of imports are landed-duty-paid prices and those
    of domestic products are prices at the factory
    door or farm gate)
  • z is the percentage change in the agents
    activity level
  • ? is the agents substitution elasticity
    (Armington elasticity) between the imported and
    the domestically produced varieties
  • Sd is the share of the agents expenditure on
    the commodity that is accounted for by the
    domestic variety and
  • Smarg is the margin share in purchasers prices,
    i.e. the combined share of wholesale, retail and
    transport costs

6
USAGE-ITC output effect
  • For understanding the size of the output effect,
    we begin with a version of the import-demand
    equation of a typical agent in USAGE-ITC
  • xd z - ? ? Sm ? (1-Smarg) ? (pd - pm)
  • where
  • xd is the percentage change in the agents demand
    for the domestic variety
  • pm and pd are the percentage changes in the
    basic prices of the imported and domestically
    produced varieties of the commodity (basic prices
    of imports are landed-duty-paid prices and those
    of domestic products are prices at the factory
    door or farm gate)
  • z is the percentage change in the agents
    activity level
  • ? is the agents substitution elasticity
    (Armington elasticity) between the imported and
    the domestically produced varieties
  • Sm is the share of the agents expenditure on the
    commodity that is accounted for by the imported
    variety and
  • Smarg is the margin share in purchasers prices,
    i.e. the combined share of wholesale, retail and
    transport costs

7
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8
Removal of significant US import restraintsGross
State product effects, per cent
9
Global CGE applications GTAP data and model
  • Chinas WTO accession illustrates challenges of
    using static model to examine a dynamic
    relationship
  • Australian FTA more standard application.
  • Standard GTAP model though we update macro
    variables, trade data, and support data
    particularly for target countries.
  • We sometimes link GTAP with USAGE, so that we can
    get more detailed US results.
  • Planning to develop linkage between dynamic USAGE
    and dynamic GTAP.
  • Many technical and data challenges.

10
Chinas WTO Accessionnote marginal impact
above trend of tariff cuts
11
Impact for China much bigger than for US
12
What are some of the dangers of using a static
model in a dynamic setting?
13
The marginal effects of the experiment are
swamped by dynamic trends.
14
Australia FTA
  • A more traditional setting for GTAP type model.
  • Interesting to compare ITC assessment to CIE
    assessment
  • CIE pushed edges of the analytical envelope.

15
Estimated Bilateral US-Aus. Trade Flows
16
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17
Estimated US-World Trade Flows
18
Range of possible net impacts
19
Changes in US output and employment distribution.
20
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