Research on World Agricultural Economy

Quantifying Tariff Equivalents of Tariff Rate Quota on Grains in Korea

Eunae Son

Department of Food and Resource Economics, Korea University, Seoul 02481, Korea

Song Soo Lim

Korea University

DOI: https://doi.org/10.36956/rwae.v6i2.1613

Received: 20 December 2024 | Revised: 13 January 2025 | Accepted: 14 January 2025 | Published Online: 16 March 2025

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Abstract

This study quantifies the tariff equivalents of  Tariff Rate Quotas (TRQs) for soybeans, corn, and rice in Korea using  an import demand models with Poisson Pseudo Maximum Likelihood estimation. The research calculates Ad Valorem Equivalents (AVEs) to reveal the trade-restrictive effects of TRQs. The analysis reveals significant variations in TRQ impacts across different grains. Rice demonstrates the most pronounced trade-restrictive effects, with an AVE of 102.59%, compared to 92.34% for soybeans and 57.33% for corn. These findings highlight the complex interplay between trade policies, domestic market conditions, and import dynamics. Notably, the model-estimated AVEs are consistently lower than traditional Uruguay Round calculations, reflecting the importance of considering in-quota tariff allowances. The analysis found that the AVE of the TRQ for each country and grain could be related to the fill rate, where a higher fill rate implies a higher AVE. The study underscores the critical need for strategic policy adjustments in Korea's agricultural trade, particularly for rice, which is characterized by mandatory imports under Minimum Market Access policies. By providing a comprehensive quantitative assessment of TRQs, this research contributes valuable insights into agricultural trade policy, offering a sophisticated approach to understanding non-tariff barriers in international grain markets. The research critically reveals how these non-tariff barriers significantly impact food security and economic efficiency in Korea, offering important implications for stabilizing supply and demand.

Keywords: Tariff Rate Quotas; Ad Valorem Equivalents; Non‑Tariff Barriers; Rice; Soybeans; Corn; Agricultural Policy

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