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Handbook on International Trade Policy

Handbook on International Trade Policy

Elgar original reference

Edited by William A. Kerr and James D. Gaisford

The Handbook on International Trade Policy is an insightful and comprehensive reference tool focusing on trade policy issues in the era of globalization. Each specially commissioned chapter deals with important international trade issues, discusses the current literature on the subject, and explores major controversies. The Handbook also directs the interested reader to further sources of information.

Chapter 20: Tariff Spikes and Tariff Escalation

André M. Nassar, Zuleika Arashiro and Marcos S. Jank

Subjects: economics and finance, international economics


223 Based on studies we develop on agricultural tariffs, we suggest an additional possibility to define peaks, which takes into consideration the variability within individual tariff structures. It consists of considering as peaks, tariffs higher than the sum of the average and one standard deviation. As we will see, each methodology brings about considerably different outcomes. Despite being extensively utilized in international studies (Hoekman et al. 2001), the standard international cut-off level presented in the first methodology has as its main limitation the fact that it does not provide an accurate identification of protected products, within individual contexts. In fact, a significant portion of developing and least developed countries tariffs are above 15 percent. Based on the first methodology, we may end up considering as tariff peaks a large group of tariffs that are actually close to a country average tariff and are not exceptional in its tariff structure. On the other hand, for developed countries, it may happen that some products that could be identified as sensitive through a country-specific measurement would not be captured under the general-based parameter. This helps understand why in international trade negotiations the standard cut level tends to be criticized as biased against developing countries. Methodology Tariff profiles vary greatly among countries. The cross-country comparison of tariff profiles is usually conducted through the utilization of standard statistical indicators such as maximum and minimum tariffs, mean, median; dispersion (standard deviation and coe...

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