Abstract
The main goal of this chapter is to define and measure the intensity of tariff preferences. Several definitions are feasible and have been used in the literature. Once the tariff margin is defined, it can be expressed in absolute or relative terms. These are not alternatives because they provide different information about trade policy. Nevertheless, however the tariff margin is defined and expressed, in the context of trade policy there are problems related to aggregation. Building on Anderson and Neary’s (Measuring the restrictiveness of international trade policy, MIT Press, Cambridge, MA, 2005) work on theoretically grounded trade policy indexes, we define an aggregate measure (Mercantilistic Trade Preference Index – MTPI) of trade preferential margins. Because it focuses on export volumes, the MTPI enables a method of aggregation that is consistent with the main objective of preferential policies. We compute sectoral MTPI for European Union (EU) preferences granted to 167 exporters, to assess how preferential market access differs across sectors.
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- 1.
This issue is dealt with in Chapter 9.
- 2.
This is in the spirit of the adjusted preferential access measure suggested by Carrère et al. (2008).
- 3.
Anderson and Neary (2003) argue that there is a rationale for a ceteris paribus trade restrictiveness index that fixes world prices even when these prices are in fact endogenous. This rationale may be that by keeping world prices constant, we focus on the component of protection explained by national policies, not by the national degree of market power.
- 4.
MAcMap provides a consistent assessment of protection across the world, including AVE rates of applied tariff duties and TRQ at the 6 digit level of the HS (http://www.cepii.fr/).
- 5.
The Comext database (http://fd.comext.eurostat.cec.eu.int/xtweb/) contains detailed foreign trade data distinguished by tariff regimes as reported by EU member states.
- 6.
Coal; Gas; Oil; Oil seeds; Plant-based fibers; Wool, silk-worm cocoons.
- 7.
The results tables do not include sectors with small numbers of products (and therefore observations), or very small trade flows (e.g. bovine meat products; dairy products; processed rice; raw milk; sugar; sugar cane, sugar beet).
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Acknowledgments
We acknowledge financial support from the “New Issues in Agricultural, Food and Bio-energy Trade (AGFOODTRADE)” (Small and Medium-scale Focused Research Project, Grant Agreement no. 212036) funded by the European Commission, and the “European Union policies, economic and trade integration processes and WTO negotiations” research project funded by the Italian Ministry of Education, University and Research (Scientific Research Programs of National Relevance 2007). We are grateful to Luca De Benedictis and David Laborde for the comments and the many conversations on the topic. Any remaining errors are solely our responsibility and the views expressed in this paper are those of the authors and do not necessarily reflect those of the European Commission.
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Cipollina, M., Salvatici, L. (2011). European Union Preferential Margins: Measurement and Aggregation Issues. In: De Benedictis, L., Salvatici, L. (eds) The Trade Impact of European Union Preferential Policies. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-16564-1_3
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DOI: https://doi.org/10.1007/978-3-642-16564-1_3
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