Tariff Escalation and Invasive Species Risk, October 2005

We investigate the interface between trade and invasive species (IS) risk, focusing on the existing tariff escalation in agro-forestry product markets and its implication for IS risk. Tariff escalation in processed agro-forestry products exacerbates the risk of IS by biasing trade flows toward increased trade of primary commodity flows and against processed-product trade. We show that reducing tariff escalation by lowering the tariff on processed goods increases allocative efficiency and reduces the IS externality, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods, leading to winwin situations.

Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs, November 2005

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 ongoing US-Japan 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.

Impact of Ownership Structure on the Performance of China’s Feed Mill Sector, April 2005

In the decade of the 1990s, China’s feed sector became increasingly privatized, more feed mills opened, and the scale of operation expanded. Capacity utilization remained low and multi-ministerial supervision was still prevalent, but the feed mill sector showed a positive performance overall, posting a growth rate of 11 percent per year. Profit margin over sales was within allowable rates set by the government of China at 3 to 5 percent. Financial efficiency improved, with a 20 percent quicker turnover of working capital. Average technical efficiency was 0.805, as more efficient feed mills increasingly gained production shares. This study finds evidence that the increasing privatization explains the improved performance of the commercial feed mill sector. The drivers that shaped the feed mill sector in the 1990s have changed with China’s accession to the World Trade Organization. With the new policy regime in place, the study foresees that, assuming an adequate supply of soy meal and an excess capacity in the feed mill sector, it is likely that China will allow corn imports up to the tariff rate quota (TRQ) of 7.2 mmt since the in-quota rate is very low at 1 percent. However, when the TRQ is exceeded, the import duty jumps to a prohibitive out-quota rate of 65 percent. With an import duty for meat of only 10 to 12 percent, China would have a strong incentive to import meat products directly rather than bringing in expensive corn to produce meat domestically. This would be further reinforced if structural transformation in the swine sector would narrow the cost differential between domestic and imported pork.

A Case Study of China’s Commercial Pork Value Chain, August 2005

In China, with the cost of improved technology rising, surplus labor shrinking, and demand for food quality and safety increasing, it will be just a matter of time before the country’s hog production sector will be commercialized like that of developed countries. However, even if China’s cost of production converges to international levels, as shown in this case study, China may continue to retain some competitive advantage because of the labor-intensive nature of the marketing services involved in hog processing and meat distribution. The supply of variety meats offers the most promising market opportunity for foreign suppliers in China. The market may open further if the tariff rate for variety meats is reduced from 20% and harmonized with the pork muscle meat rate of 12%, and if the value-added tax of 13% is applied equally to both imported and domestic products. The fast-growing Western-style family restaurant and higher-end dining sector is another market opportunity for high-quality imported pork.

Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk, December 2006

We analyze the linkage between protectionism and invasive species (IS) hazard in the context of two-way trade and multilateral trade integration, two major features of real-world agricultural trade. Multilateral integration includes the joint reduction of tariffs and trade costs among trading partners. Multilateral trade integration is more likely to increase damages from IS than predicted by unilateral trade opening under the classic Heckscher-Ohlin-Samuelson (HOS) framework because domestic production (the base susceptible to damages) is likely to increase with expanding export markets. A country integrating its trade with a partner characterized by relatively higher tariff and trade costs is also more likely to experience increased IS damages via expanded domestic production for the same reason. We illustrate our analytical results with a stylized model of the world wheat market.

Are Standards Always Protectionist?

We analyze the effects of a domestic standard that reduces an externality associated with the consumption of the good targeted by the standard, using a model in which foreign and domestic producers compete in the domestic good market. Producers can reduce expected damage associated with the externality by incurring a cost that varies by source of origin. Despite potential protectionism, the standard is useful in correcting the consumption externality in the domestic country. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. The standard is actually anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper provides important implications for the estimation and use of tariff equivalents of nontariff barriers.

Major Home Appliances,2008

If you haven’t been in the market for new appliances during the past several years, you’re going to be surprised at how innovative and energy-efficient appliances have become. You’ll find energy-smart appliance choices in almost all price ranges. Before heading to the local appliance retailer or “big-box” store, measure the space the new appliance will occupy to make sure it will fit—and that there’s enough room to fully open the door (or lid), as well as adequate clearances for ventilation, plumbing connections and other hookups. Then go to the appliance manufacturers’ Web sites to look at product information, and make a list of questions and “must-have” and “nice-to-have-but-not-essential” features.

Major Home Appliances, 2011

If you haven’t been in the market for new appliances during the past several years, you’re going to be surprised at how innovative and energy-efficient appliances have become. You’ll find energy-smart appliance choices in almost all price ranges. Before heading to the local appliance retailer or “big-box” store, measure the space the new appliance will occupy to make sure it will fit—and that there’s enough room to fully open the door (or lid), as well as adequate clearances for ventilation, plumbing connections and other hookups. Then go to the appliance manufacturers’ Web sites to look at product information, and make a list of questions and “must-have” and “nice-to-have-but-not-essential” features.