• Title/Summary/Keyword: Tariff Reductions

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The Optimal Degree of Reciprocity in Tariff Reduction

  • Chang, Pao-Li
    • East Asian Economic Review
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    • v.24 no.3
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    • pp.237-252
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    • 2020
  • This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity heterogeneity. In particular, without making parametric assumptions on firm productivity distribution, this paper derives the optimal degree of reciprocal tariff reductions that maximize the world welfare. A reciprocal import subsidy raises the industry productivity, lowering aggregate price; a reciprocal import tariff helps correct the markup distortion, increasing nominal income. With all the conflicting effects of import tariffs on welfare considered, the optimal degree of reciprocity in multilateral tariff reduction is shown to be free trade.

A Quantitative Trade Model with Unemployment

  • Lee, Kyu Yub
    • East Asian Economic Review
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    • v.23 no.1
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    • pp.27-53
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    • 2019
  • I employ search-and-matching to a multi-country and multi-sector Ricardian model with input-output linkages, trade in intermediate goods, and sectoral heterogeneity, in order to quantify the welfare effects from tariff changes. The paper shows that labor market frictions can be a source of comparative advantage in the sense that better labor market conditions contribute to lower cost in production. Labor market frictions play a critical role in determining the probability of exporting goods to trading partners, and interact with bilateral trade share, price, expenditures, etc. Unemployment and changes in unemployment rates due to tariff reductions contribute welfare changes across countries, implying that welfare effects based on quantitative trade models with full-employment are likely to be biased. I confirm the biased welfare effects by revisiting Caliendo and Parro (2015), who conduct an analysis of the welfare effects from the NAFTA from 1993 to 2005. I show that the welfare gap between theirs and mine has a positive correlation with changes in observed unemployment rates across countries. With the constructed model, I further conduct counterfactual exercises by asking what would happen if China's tariffs remain unchanged from 2006 to 2015. It turns out that there are mild welfare effects to trading partners in the world trading system.

Modeling the Price-Reduction Effect in Mobile Telecommunications Traffic

  • Cha Kyoung Cheon;Jun Duk Bin;Wilson Amy R.
    • Proceedings of the Korean Operations and Management Science Society Conference
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    • 2004.10a
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    • pp.289-303
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    • 2004
  • As needs for telecommunications services diversify, an increasingly wide range of telecommunications services is becoming available in the market. Any subscriber can find a service to satisfy his/her telecommunication requirements and competition between providers to retain heavy users is increasing. Service price reductions are one retention strategy, although price reductions for one service can affect the individual-level usage for other services. Price reductions can also be imposed on a service provider by regulation. For these reasons, understanding how price reductions affect service usage is of growing importance to the telecommunications industry for purposes of pricing and tariff development. In this paper, we develop an individual-level usage model for telecommunications services and analyze the effects on usage of a price reduction. We apply the model to age-stratified aggregate traffic data for a Korean mobile telecommunication service provider. Finally, we develop a model to support a market segmentation and price reduction strategy.

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Trade Liberalization and Customs Revenue in Vietnam

  • LE, Thi Anh Tuyet
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.8
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    • pp.213-224
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    • 2020
  • The study assesses the impact of trade liberalization factors on changes in customs revenues in Vietnam. Research data was conducted between 2002 and 2017 on the official website of the Government's Web Portal and The World Bank. This paper uses the vector error correction model to estimate the short-term and long term relationship between data series. The results have proven that tariff reductions have a positive effect on short-term and long-term customs revenues in Vietnam. However, the implementation of other international commitments on trade liberalization has positive short-term and long-term negative impacts on customs revenues in Vietnam. The study's results also show that exchange rate has no effect on changes in customs revenues in the short term but it has a strong impact on increasing customs revenues in the long run. Based on these findings, the article also suggests a number of policies to ensure customs revenues in Vietnam in future. In order to ensure customs revenues, the government of Vietnam should: (1) having some policy to improve the efficiency of customs management in Vietnam; (2) Building appropriate VND exchange rate policy; (3) Establishing reasonable non - tariff barriers to prevent fraud and ovations cause losses in customs revenues.

How APEC Affects the Intra-trade of Members: An Empirical Study

  • Lee, Donghae
    • Journal of Distribution Science
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    • v.10 no.12
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    • pp.13-17
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    • 2012
  • Purpose - The Asia-Pacific Economic Cooperation (APEC) forum has evolved and is actively facilitating free and open trade. It is debated whether APEC has effectively reduced trade barriers in a preferential manner to encourage liberalized trade and whether increased trade between member countries has reduced trade with nonmember countries. Research designs, data, methodology -This paper empirically tests whether APEC creates or diverts trade, using an extended gravity model with tariff rates, exchange rates, and dummy variables to analyze how APEC affects intra-trade between members.The model utilizes the annual panel data between 1990 and 2007 of 16 selected APEC members and nonmembers. Results - Results reveal the changing role of APEC only between 2002 and 2007 has it created trade, fostering increased trade among trading partners and between members and nonmembers. Conclusion - APEC can be expected to demonstrate a stronger trade creating effect once its advanced and developing members complete tariff reductions by 2010 and 2020, respectively.

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Implementation Assessment of WTO Agricultural Agreement and its Impacts on Non-Timber Forest Products Markets (WTO 농업협정(農業協定)의 이행평가(履行評價)와 단기소득임산물(短期所得林産物) 시장(市場)에 미친 영향(影響))

  • Joo, Rin Won;Jung, Byung Heon;Jeon, Hyon Sun;Kim, Eui Gyeong;Kim, Wae Jung
    • Journal of Korean Society of Forest Science
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    • v.90 no.3
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    • pp.373-379
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    • 2001
  • The objectives of this study were to assess implementation on tariff quotas and tariff cuts committed in the WTO as result of Uruguay Round(UR) negotiations and to examine impacts of reductions in agricultural protection agreed in the UR on major non-timber forest products markets. The implementation of WTO Agreement on Agriculture was analysed based on the relevant data and statistics. The impacts of implementation on tariff cuts and tariff quotas on non-timber forest products markets were estimated by using supply and demand elasticities from previous studies and data on production, consumption and trade after UR. The quantities of Chestnut, Pine nut and Jujube imported by the system of tariff quota did not exceed the committed quotas over the five years from 1995 to 1999. The current level of applied rates on imports of non-timber products is much lower than that of bound rates, which will be maintained until the year 2004. It is estimated that increase in imports after UR reduced prices and that reduction in prices led to decrease in expenditure and to increase in consumer surplus. It is estimated, however, that production level significantly decreased due to rise in imports and that the negative effects on production exceeded positive effects on consumption. Exports of most non-timber forest products decreased after UR even though non-timber forest products could gain access to the export markets at the lower tariffs as a result of UR.

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The Impact of Tariffs on Vietnam's Trade in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

  • LE, Thi Anh Tuyet
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.771-780
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    • 2021
  • The study assesses the impact of tariffs on Vietnam's trade in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Research data was conducted between 2001 and 2018 on the official website of the Uncomtrade and the World Bank. This paper uses the gravity model to estimate the relationship between data series and considers the impact of factors on Vietnam's trade with CPTPP countries. The results have proven that tariff reductions have a positive effect on Vietnam's trade. Besides, the trade openness of Vietnam and CPTPP countries has positive impacts on Vietnam's trade. The study also shows that Real Effective Exchange Rate (REER) between Vietnam's and CPTPP countries' currencies has no strong effect on Vietnam's trade. Based on these findings, the article also suggests a number of policies to promote Vietnam's trade in future. In order to support businesses to better utilize opportunities and promote exports to CPTPP countries, the government of Vietnam should: (1) focus on reducing costs and time to participate in the market for production and business investors; (2) improve business investment environment to mobilize resources for production; and (3) continue to organize information campaigns to raise businesses' awareness of how to take advantage of CPTPP preferences.

A Study on the Optimal Cut-off Level of Simple Tax Rate in Korea : Cases of traveler's customs clearance (한국 간이세율의 적정 인하수준 추정에 관한 연구: 여행자 휴대품 통관을 중심으로)

  • Kim, Hee-Kwon;Kim, Hee-Ho
    • Korea Trade Review
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    • v.43 no.6
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    • pp.215-238
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    • 2018
  • Tariff reduction from FTAs are applied to imported goods, but not to traveler's goods. There are difficulties in meeting the FTA's conditions for free tariff application, such as origin of goods and direct transportation. This study suggests the optimal cut-off level of a simple tax rate applied to traveler's goods with respect to traveler' welfare and government tax revenue. Among three different scenarios of simple tax reductions by ordering its weighted magnitude of effects, the optimal tariff was found to be 2% applied to all goods. The effects of a 2% reduction of simple tax rate would increase traveler' welfare by 16.8 billion won and reduce tax revenue by only 0.34 billion won.

Building Indoor Temperature Control Using Control Horizon Method in Cooling Systems (냉방시스템 제어구간설정 방법을 이용한 건물 실내온도 제어)

  • Boo, Chang-Jin;Kim, Jeong-Hyuk;Kim, Ho-Chan
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.13 no.10
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    • pp.4902-4909
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    • 2012
  • In this paper, the TOU tariff's based building indoor temperature control algorithm in cooling systems is proposed using control horizon method. A control horizon switching method and linear programming algorithm is used for optimal control, and both TOU and peak tariffs are included to calculate the energy costs. Simulation results show that the reductions of energy cost and peak power can be obtained using proposed algorithms.

Building Indoor Temperature Control Using PSO Algorithm (PSO 알고리즘을 이용한 건물 실내온도 제어)

  • Kim, Jeong-Hyuk;Kim, Ho-Chan
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.14 no.5
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    • pp.2536-2543
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    • 2013
  • In this paper, we proposed the modeling in one zone buildings and the energy efficient temperature control algorithm using particle swarm optimization (PSO). A control horizon switching method with PSO is used for optimal control, and the TOU tariff is included to calculate the energy costs. Simulation results show that the reductions of energy cost and peak power can be obtained using proposed algorithms.