Implementation of tariff rate quotas in the Philippines
In this study, an existing TRQ model was utilized to determine how effective TRQs are as a trade policy instrument for trade liberalization and increasing market access. The results reveal that the Philippine corn market was restricted by the out-quota tariff. De facto liberalization of the TRQ at the level of the out-quota rate (50%) or even at 35% (in-quota rate), does not completely liberalize the corn market. Progressively reducing both tariffs liberalizes the market and leads to increases in surpluses. The lower tariffs, however, lead to less government revenues. The smaller the gap between the in-quota and out-quota, the smaller the quota rents become. Increasing the quotas has no significant impact in liberalizing the corn market, and the increase in imports decrease producer surplus in all cases.
The TRQ model of the Philippine corn sector reveals that changing the components of the TRQ would lead to different impacts on supply, demand, consumer, producer and net surplus, and government revenues. Knowledge of the regime in which the country is trading can determine which individual policy instrument of the TRQ, the in-quota and out-quota tariff and the quota, should be used to increase market access or address the concerns of stakeholders in the corn sector. It is thus important for policy makers to find a workable tariff level that would serve the interest of all stakeholders in the sector.
School:Kansas State University
School Location:USA - Kansas
Source Type:Master's Thesis
Keywords:tariff rate quotas agricultural trade quota rents philippines economics 0503
Date of Publication:01/01/2007