国贸英文版课件Ch.5 Tariffs.ppt

2. Nominal versus effective tariff rates (1) Nominal tariff rate The tariff rate in the tariff schedule. Simplest way to estimate the nominal rate of protection of an industry, if tariffs are the only barrier that restricts imports and applied to all imports without exception. For domestic producers, of greater interest than the price rise is the rise in value added. Pd: domestic market price Pi: import price (2) Effective tariff rate (effective rate of protection, ERP) ERP: The rate by which the value added increases after the imposition of tariffs. VA : the value added under protection VA: the value added with free trade Example: Suppose under free trade: (F: final good, A and B two inputs) PF = $1,000 , PA = $400, PB = $300. VA = $1,000 - ($400 + $300) = $300. Now suppose: tF = 15%, tA = 8%, tB = 5% PF = $1,000 + .15 ($1,000) = $1,000 + $150 = $1150 PA= $400 + .08 ($400) = $400 + $32 = $432 PB= $300 + .05 ($300) = $300 + $15 = $315 VA′ = $1,150 - ($432 +$315) = $403 $300 aij : the free trade value of input i as a percentage of the free trade value of the final good j. tj : the tariff rate on the final good j. ti: the tariff rate on any input i. ∑i: summing over all inputs. if only one input has the advantage of illustrating three general rules about the relationship between nominal rates and effective rate of protection. Rules: (a) if tj the weighted average ti, then ERP tj; (b) if tj the weighted average ti, then ERP tj; (c) if tj = the weighted average ti, then ERP = tj. Rule (a) incorporates an escalated tariff structure. An ERP can be negative, meaning that the tariffs on inputs are considerably higher than the tariff on the final goods. Thus, the structure of tariffs in this latter si