|Home > Chinese Tariff Rate Quota v.s. U.S. Subsidies: What Affects the World Cotton Market More?|
This paper compares how eliminating the Chinese cotton tariff rate quota (TRQ) and the U.S. cotton subsidy program would affect the world cotton market. The results show China's TRQ has a greater negative impact on the world cotton market than U.S. subsidies. Compared to a base level estimate, the elimination of China's TRQ will increase the world cotton price and increase the quantity of world cotton traded whereas the elimination of U.S. cotton subsidies increases the cotton price (but less than under TRQ elimination) and decreases the world cotton trade. The combined effect of eliminating both programs is also shown.