Handbook on International Trade Policy
Show Less

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.
Buy Book in Print
Show Summary Details

Chapter 23: Tariff Rate Quotas

David Skully

Extract

23 Tariff rate quotas David Skully Definition A tariff-rate quota (TRQ) is a two-level tariff. During a specified period, it allows a specified volume of imports at the lower tariff and charges additional imports the higher tariff. In many languages TRQs are called ‘contingent tariffs’ which emphasizes that the tariff applied is contingent on the cumulative volume of trade.1 A TRQ has four components: (a) an in-quota tariff (also called a low-tier tariff); (b) an over-quota tariff (also called a high-tier tariff); (c) a quota that specifies the volume of imports charged the in-quota tariff; and (d) a method of administration. For example, a TRQ could allow one million tonnes of salt to be imported at a onecent-per-kilo tariff and charge a one-dollar-per-kilo tariff on any additional salt imports. Since a dollar-per-kilo tariff on salt would likely prevent imports beyond one million tonnes, this TRQ appears to be no different from a regular or absolute quota of a million tonnes. The distinction is that under an absolute quota it would be legally impossible for imports to exceed the million-tonne quota, whereas a TRQ allows imports to exceed the one-million-tonne quota. It might be economically irrational to import at the higher tariff, but it is legally possible. Mechanics Figures 23.1, 23.2 and 23.3 illustrate how a TRQ imposes disincentives on trade. The twolevel tariff results in a stepped import supply function. Imports within the quota are charged the lower tariff (t), and over-quota imports...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.