Regulation and Protectionism under GATT: Case Studies in North American Agriculture

By Andrew Schmitz; Garth Coffin et al. | Go to book overview

Notes
1.
This author defines a tariff-rate quota in the context of GATT as a policy in which the country must allow a certain quantity of imports at the world market price, up to the rule defined by minimum access. Any extra amount must be sold at the tariff markup price.
2.
For a more comprehensive summary of the issues surrounding supply management, see Schmitz and Schmitz ( 1994).
3.
This model is entirely different from the previous model developed by Schmitz and Skinner ( 1996) because in that model producers were allowed to maximize profits with no additional constraints placed on them by the processing and retail sectors. The model presented here is a preliminary version of a model that will eventually be developed for a Ph.D. dissertation by T. G. Schmitz to be completed at the University of California at Berkeley.
4.
It is assumed that the transportation of live birds from a producer within a province to a processor in that same province is negligible.
5.
Note that p. is the lagrangian multiplier for the klth constraint.
6.
In actuality, imports should be endogenous because the URA rules imply that an amount equal to 7.5% of domestic production will be allowed to enter the country. This question is beyond the scope of this chapter and will be resolved in a forthcoming dissertation by T. G. Schmitz.
7.
Most studies report the demand elasticity anywhere between -0.75 and -1.0.
8.
Most would agree that the marginal cost curve of the broiler industry in Canada is pretty flat. If anything, this estimate may be too low which would imply that changes in trade flows resulting from this model are smaller than those under a higher supply elasticity.
9.
For a theoretical discussion on the use of economic surplus as a welfare measure, see Just, Hueth and Schmitz ( 1982).
10.
This is in no way meant to indicate that they act as a Stackelberg leader in the industry. However, it would be interesting to see what the Stackelberg outcome might look like.
11.
Very little in terms of economics literature has been done to analyze the impacts of the growing further processing industry on quota allocation across Stackelberg. Further research in this area is needed.
12.
Again, it must be emphasized that this result will only hold if Ontario sticks to its high production levels. However, it may be time-inconsistent for it to do so since once the national structure has collapsed with the provincial structure still in place, it would be better off to greatly reduce production.
13.
It should be noted that this result tends to support the hypothesis that even under the current CCMA structure, the prairie provinces should be allowed to expand production while the other provinces contract.

References

Agriculture Canada. 1992. Poultry Market Review Handbook. Ottawa, Ontario, Canada.

Canadian Census Bureau. 1992. 1991 Census Report. Ottawa, Ontario, Canada.

CCMA. 1993. 1990 Cost of Production Study Update. Ottawa, Ontario, Canada.

-330-

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Regulation and Protectionism under GATT: Case Studies in North American Agriculture
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Acknowledgments vii
  • About the Editors and Contributors ix
  • Section One - Overview of the Effects of Gatt 1
  • 1 - Itroduction: Trade and Regulations in Transition 3
  • References 18
  • 2 - Post-Gatt Assessment of the World Marketplace 20
  • Notes 35
  • 3 - Consequences of Tariffication 37
  • References 50
  • 4 - Supply Management Under Minimum Import Access Requirements 51
  • Notes 62
  • References 62
  • 5 - Imports into Canada: Why Have They Remained Low? 64
  • Notes 76
  • References 77
  • Section Two - Case Studies of Gatt's Effects 79
  • 6 - Regulation -- the Us Dairy Industry 81
  • References 94
  • 7 - Cost Competitiveness in the Canadian and Us Dairy Industries 96
  • Notes 115
  • References 116
  • 8 - Supply Management and Vertical Coordination: the Role of Cooperatives 118
  • Notes 126
  • References 127
  • 9 - Value-Added Economic Potential 128
  • Notes 145
  • References 146
  • 10 - Tobacco Supply Management: Examples from the United States and Australia 147
  • References 158
  • 11 - Gatt and the Us Peanut Market 160
  • Notes 178
  • References 179
  • 12 - The Us Sugar Industry: the Free Trade Debate 180
  • Notes 199
  • References 201
  • Section Three - Regulation and Supply Management 203
  • 13 - Supply Management Canadian Style 205
  • Notes 221
  • References 223
  • 14 - Power Relationships in the Political Process 226
  • Notes 241
  • References 244
  • 15 - Provincialism: Problems for the Regulators and the Regulated 245
  • References 267
  • 16 - Provmcial Versus Centralized Pricing: Protectionism and Institutional Design 269
  • References 283
  • 17 - Venturing into the Political Market 284
  • Notes 296
  • 18 - Vertical and Horizontal Coordination 299
  • Notes 312
  • References 313
  • 19 - Will the Supply Management Cartel Stand? 314
  • Notes 330
  • References 330
  • About the Book 332
  • Index 333
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