Edited by William A. Kerr and James D. Gaisford
Chapter 20: Tariff Spikes and Tariff Escalation
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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