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.

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.

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.

Pilot Project for a Hybrid Road-Flooding Forecasting System on Squaw Creek, TR-642

A network of 25 sonic stage sensors were deployed in the Squaw Creek basin upstream from Ames Iowa to determine if the state-of-the-art distributed hydrological model CUENCAS can produce reliable information for all road crossings including those that cross small creeks draining basins as small as 1 sq. mile. A hydraulic model was implemented for the major tributaries of the Squaw Creek where IFC sonic instruments were deployed and it was coupled to CUENCAS to validate the predictions made at small tributaries in the basin. This study demonstrates that the predictions made by the hydrological model at internal locations in the basins are as accurate as the predictions made at the outlet of the basin. Final rating curves based on surveyed cross sections were developed for the 22 IFC-bridge sites that are currently operating, and routine forecast is provided at those locations (see IFIS). Rating curves were developed for 60 additional bridge locations in the basin, however, we do not use those rating curves for routine forecast because the lack of accuracy of LiDAR derived cross sections is not optimal. The results of our work form the basis for two papers that have been submitted for publication to the Journal of Hydrological Engineering. Peer review of our work will gives a strong footing to our ability to expand our results from the pilot Squaw Creek basin to all basins in Iowa.