Non-tariff barriers removal in the Brazilian coffee industry
Journal of International Trade Law and Policy
ISSN: 1477-0024
Article publication date: 30 October 2020
Issue publication date: 28 November 2020
Abstract
Purpose
This study aims to identify and classified non-tariff measures (NTMs) on Brazilian imports of robusta coffee beans, calculated a tariff-equivalent of non-tariff barriers (NTBs) and assessed the effects of removing NTBs from upstream and downstream domestic instant coffee supply chain.
Design/methodology/approach
The analysis uses documentary research to identify NTMs and the price-wedge method is applied to estimate a tariff-equivalent. The effects of suppressing the tariff-equivalent were evaluated using a partial equilibrium model with constant elasticity of substitution (Armington, 1969) and by incorporating vertical integration and uncertainty (Hallren and Opanasets, 2018).
Findings
The results show that NTMs seemingly hinder the entrance of coffee beans into the domestic market. The tariff-equivalent was estimated at 13.61%. Suppressing it reveals that the share of domestic coffee beans used to produce domestic instant coffee falls 0.21 p.p. while the share of domestic instant coffee consumed by the international trade rises 8.60 p.p.
Originality/value
What makes this paper original is that this paper investigated the effects of NTMs in a developing country, namely, Brazil. Although Brazil is one of the largest agricultural producers in the world, it has not appeared in literature in this type of analysis until now. Furthermore, it contributes to the literature on using existing techniques to investigate the impact of NTM removal on individual products in a specific country, in contrast to more recent papers that discuss using multi-country and multi-product data sets at the HTS-6 level. Thus, this paper demonstrates how a case study approach can be useful in quantifying policy changes.
Keywords
Acknowledgements
This paper is part of the research project entitled “Non-tariff barriers in the Brazilian Agribusiness” of the Department of International Studies, Political and Economic Relations (Dinte) of the Brazilian Institute for Applied Economic Research (Ipea). We thank the Ipea for financial support. We also thank Ross Hallren, from US International Trade Commission (USITC), Honório Kume, from the Rio de Janeiro State University (UERJ), for the methodological support kindly provided, Fernando José da Silva Paiva Ribeiro and Ivan Tiago Machado Oliveira, from Dinte and Uallace Moreira Lima, from the Federal University of Bahia (UFBA), for the comments and suggestions. Useful comments from the anonymous reviewers and from participants at the Inter-Conference Symposium of IAAE-2019 in Nanjing, China are gratefully acknowledged. All remaining errors are our own.
Citation
Mendes, K. and Luchine, A. (2020), "Non-tariff barriers removal in the Brazilian coffee industry", Journal of International Trade Law and Policy, Vol. 19 No. 3, pp. 139-157. https://doi.org/10.1108/JITLP-04-2020-0027
Publisher
:Emerald Publishing Limited
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