IMPROVING MARKET ACCESS: THE ROLE OF AUCTIONS IN CONVERTING TARIFF-RATE QUOTAS INTO SINGLE TARIFFS

Review of Agricultural and Applied Economics, RAAE, VOL.17, No. 1/2014

ARTICLE TYPE: REGULAR ARTICLE
RECORD ONLINE: 25.03.2014
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KEYWORDS:
tariff-rate quotas, imperfect competition, auctions, WTO
DOI NUMBER:
10.15414/raae.2014.17.01.24-30
ABSTRACT:
This paper analyses the conversion of TRQs into single tariffs under perfect and imperfect competition. Based on experiences from Switzerland, auctions allow the determination of the equivalent tariffs. Results from auctions of TRQs of dried meat products under perfect competition show that the observed auction prices would lead to tariffs which are below the equivalent tariffs. Hence, if the ‘new tariffs’ would be determined through auctions, market access would be improved, but also farm prices would lower. However, under imperfect competition, based on Bhagwati’s theorem of the non-equivalence of tariffs and quotas, market access could be improved by converting TRQs into single tariffs even if farm prices are held constant. In order to ensure that auctions are competitive and collusion among bidders is prevented, the ‘variable supply’ auction format which re¬sists collusion needs to be adopted in the event of high buyer’s concentration. Despite the various benefits of auctions, quota holders’ persisting rent-seeking behaviour hinders that auctions are mainstreamed in allocating TRQs.
JEL CODES:
Q17, F13, D44
PAGES:
24 - 30
Please Cite this Article as:

Robert Joerin (2014) Improving Market Access: The Role Of Auctions In Converting Tariff-rate Quotas Into Single Tariffs. Review of Agricultural and Applied Economics. XVII (Number 1, 2014): 24-30. doi: 10.15414/raae.2014.17.01.24-30
URL for sharing:

https://roaae.org/1336-9261/doi/abs/10.15414/raae.2014.17.01.24-30

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Review of Agricultural and Applied Economics | ISSN 1336-9261
Faculty of Economics and Management of the Slovak Agricultural University in Nitra and the Association of Agricultural Economists in Slovakia.
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