Premium
Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs
Author(s) -
Yue Chengyan,
Beghin John,
Jensen Helen H.
Publication year - 2006
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2006.00908.x
Subject(s) - tariff , economics , technical barriers to trade , substitution (logic) , yield (engineering) , trade barrier , elasticity of substitution , commercial policy , international economics , imperfect , international trade , microeconomics , production (economics) , computer science , linguistics , philosophy , materials science , metallurgy , programming language
The price‐wedge method yields a tariff‐equivalent estimate of technical barriers to trade (TBT). An extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs. We explore the sensitivity of this revamped TBT estimate to its key determinants (substitution elasticity, preference for home good, and trade cost). We use the augmented approach to investigate the recent Japan–U.S. apple trade dispute and find that removing the Japanese TBT would yield limited export gains to the United States. We then draw policy implications of our findings.