The Impact of the Tariff‐Rate Quota on Sugar Imports on the US Economy

Abstract

Examines the impact of the sugar tariff‐rate import quota programme on the United States economy. Uses a computable general equilibrium model composed of 14 producing sectors, 14 consuming sectors, six household categories classified by fincome, and a government. Examines the effects of abolishing the tariff‐rate import quota on sugar prices and quantities. Suggests that a complete elimination of the sugar programme would result in lower output by all producing sectors (by about $2.85 billion) but, for all producing sectors besides the agriculture programme crops, crude oil, and petroleum refining sectors, output would actually increase (by about $2.98 billion). There would also be an increase in the consumption of goods and services (by about $197 million), and an increase in welfare (by about $121 million). The government would realize a reduction in revenue of about $15 million. When subjected to a sensitivity analysis, the study′s results are reasonably robust with regard to the assumption of the value of the own‐price elasticity of demand for sugar – i.e., while the model′s equilibrium values do vary in response to different assumptions of the values of this elasticity, the fluctuations are not so enormous as to suggest that the model is unrealistically sensitive to these parameters.

Citation

Uri, N.D. and Boyd, R. (1994), "The Impact of the Tariff‐Rate Quota on Sugar Imports on the US Economy", Journal of Economic Studies, Vol. 21 No. 1, pp. 16-40. https://doi.org/10.1108/01443589410057559