Premium
International Marketing Margins for Agricultural Products: Effects of Some Nontariff Trade Barriers
Author(s) -
Gallagher Paul
Publication year - 1998
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 - 10.2307/1244505
Subject(s) - economic rent , trade barrier , commodity , economics , welfare , subsidy , international economics , free trade , agriculture , arbitrage , international trade , economic integration , gains from trade , business , microeconomics , market economy , financial economics , biology , ecology
Trade uncertainty occurs when quality changes or when Administrative Trade Barriers (ATBs) cause a chance that a commodity will not enter the import market. Trade uncertainty adversely affects marketing firms and commodity trade. But arbitrage still precludes the distribution of rents to middlemen. An exporter subsidy may correct price distortions and expand trade towards the highest world welfare. The case for intervention appears strongest in thin markets with a low number of trade transactions and perishable commodities. Nonetheless, promoting trade liberalization before other interventions may still make sense when ATBs are present because reduced trade uncertainty also improves world welfare.