trade & policy issues trade interventions & trade agreements framework for analyzing international...
Post on 30-Mar-2015
Embed Size (px)
- Slide 1
Trade & Policy Issues Trade Interventions & Trade Agreements Framework for Analyzing International Trade & Trade Policy Interventions Slide 2 Trade Policy Interventions (Imports) Tariffs - absolute vs ad valorum, variable levy March 2009 - Mexico to raise tariffs on 90 U.S. agr & industrial products, worth more than $2.4 B Tariff on fresh grapes - 45% Source: World Tariff Profiles, 2011. WTO Geneva Canadian Tariffs on Imports % Average rate across each category Slide 3 Tariff Lines - Specific Examples HS Code ======================================================== 0105.11.22Broilers for domestic production: 238% 0105.99Turkeys: 154.5% 1001.90Common wheat 76.5% 1001.10Durum wheat 49% 1003.00Barley (malting) 94.5% 10.06Rice Free 106.90.32 Milk, cream or butter substitutes, 50% or more dairy content, 212% ======================================================== Canadian Boarder Services Agency - Chapter-by-Chapter Customs Tariff T2011-3 http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2011/01-99/tblmod-t2011-03-eng.html Slide 4 Canadian Tariffs Source: World Tariff Profiles, 2011. WTO, Geneva Proportion of tariff lines duty-freeMax tariff in category Share of Harmonized System (HS) nominclature 6 digit sub-headings with at least one bound tariff line Slide 5 US Tariffs Source: World Tariff Profiles, 2011. WTO, Geneva Slide 6 Japan Tariffs Source: World Tariff Profiles, 2011. WTO, Geneva Slide 7 EU Tariffs Source: World Tariff Profiles, 2011. WTO, Geneva Slide 8 Examples of TRQ and over-quota tariffs Source: Canadian Dairy Commission (2011) ProductTRQ (000 t)Tariff (%) Skim Milk Powder0201.5 Whey Powder3.2208.0 Butter3.3298.5 Cheese20.4245.5 Ice cream0.484277.0 Quotas & TRQs (tariff rate quotas) Slide 9 Trade Policy Interventions (Imports) Non-Tariff Barriers (NTB) Production Standards: Phyto-sanitary restrictions Labeling, documentation, containers 2009 - US refuses to allow Mexican trucks to carry cargo over U.S. roads (safety concerns) July 2008 - Product of Canada - virtually all ingredients (98%), processing and labour is Canadian Made in Canada - manufactured or processed in Canada - ingredients imported or domestic 2002 - Country of Origin Labeling (COOL); fresh pork, beef, lamb fresh fruits & vegetables Pre - 2008 - Product of Canada - 51% Canadian content by value Slide 10 Trade Policy Interventions Exports Export taxes (Argentina, developing countries) Export subsidies (EU, US - EEP) Voluntary Export Restrictions (VERs) Indirect Policies Direct or indirect production supports Production subsidies Supports for providing environmental services Slide 11 Trade Policy Agreements Countries have different objectives (agendas) International agreements Gobal LevelWTO (GATT) RegionalEuropean Union, NAFTA, ASEAN, APTA, CARICOM BilateralCanada and its dancing partners: Chile, Columbia, Costa Rica, EFTA, Peru, Switzerland, India (in progress 2011) Economic self sufficiency protect producers, consumers expand exports Political (domestic constituencies) Slide 12 Post WWII Environment Origins of the WTO (ITO) Why was a new world order important? Bretton Woods Agreements July 1944, delegates from 44 nations IMF, World Bank, GATT/WTO US Senate: failure to ratify (ITO) Birth of the GATT Consensus document Temporary measuresEliminate trade distorting policies import barriers (quotas, tariffs) production subsidies Multiple rounds Kennedy, Tokyo, Uruguay, Doha Doha is on life support Slide 13 Two Country Analytical Model Compatibility of excess demand and supply relationships Select one of the two countrys currency for vertical axis of trade sector Use exchange rate to adjust either ED or ES Simplifying assumptions No transportation costs No governmental interference Excess demand & supply framework OR - assume 1:1 rate of exchange Slide 14 Two Country Analytical Model Country 2 low price Country 1 High Price QImports Exports Slide 15 Relaxing Simplifying Assumptions Governmental influence on volume of trade Tariffs, Subsidies Quotas, Licenses Exchange rate management Other non-tariff barriers Non-zero transportation costs Handled in same way as interregional trade Slide 16 Two Country Analytical Model Absolute Tariff Country 2 Country 1 QImports Exports Country 2 - OR Rest of the world Slide 17 Two Country Analytical Model Percentage (Ad valorum) Tariff Country 2 Country 1 QImports Exports Exchange rate devaluation - Importer Slide 18 Two Country Analytical Model Exporter Devaluation Country 2 Country 1 QImports Exports Slide 19 Two Country Analytical Model Import Quota Country 2 Country 1 QImports Exports Slide 20 Two Country Analytical Model Export Subsidy Country 2 Country 1 QImports Exports