India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

TABLE 6.2 <strong>India</strong>: Estimated economic effects <strong>of</strong> removing NTMs on U.S. exports, 2007
Commodity groups
containing food <strong>and</strong>
agricultural products
2007 U.S. food
<strong>and</strong> agricultural
Range <strong>of</strong> simulated
U.S. exports to <strong>India</strong>
in the absence <strong>of</strong>
<strong>India</strong>n NTMs
Range <strong>of</strong> simulated change in U.S. exports
to <strong>India</strong> in the absence <strong>of</strong> <strong>India</strong>n NTMs
exports to <strong>India</strong> Low High Low High Low High
Million $ Million $ Million $ Million $ Percent a
Wheat 0.00 145.51 334.25 145.51 334.25 ( b ) ( b )
Cereal grains n.e.c. 1.13 2.67 8.64 1.54 7.50 135 661
Meat products n.e.c. 0.11 0.19 0.22 0.08 0.10 71 93
Dairy products 8.66 23.26 29.10 15.04 20.44 183 216
Beverages <strong>and</strong>
tobacco products 4.19 10.39 13.53 6.20 9.34 146 223
Leather products 7.65 5.16 4.96 -2.50 -2.70 -33 -35
Total 21.75 187.18 390.68 165.67 396.67 96 165
Source: Commission staff calculations.
Note: “Low” <strong>and</strong> “High” refer to elasticities, not effects on U.S. exports; “not elsewhere classified” is denoted as
“n.e.c.”
a Total percentage changes for U.S. exports exclude wheat.
b Not applicable.
hides <strong>and</strong> skins; import bans for poultry; <strong>and</strong> labeling <strong>and</strong> import monitoring
requirements for wine <strong>and</strong> alcoholic beverages. 85 NTM issues affecting importation <strong>of</strong>
U.S. agricultural products generally, such as customs procedures, notice <strong>and</strong> comment
procedures, <strong>and</strong> corruption, may also affect these products, as well as products not
modeled.
Estimation <strong>of</strong> the NTM effects involves three steps: estimation <strong>of</strong> price gaps,
identification <strong>of</strong> policies associated with those gaps, <strong>and</strong> simulation <strong>of</strong> economic effects.
Because the presence <strong>of</strong> an NTM raises domestic prices <strong>and</strong> reduces quantities <strong>of</strong> imports
much as a tariff does, Commission staff first identified products in the study for which
<strong>India</strong>n import prices are higher than export prices for the same goods from the same
suppliers elsewhere in the world, after adjusting for transport costs. Commission staff
estimated tariff equivalents for these products (table 6.3), 86 using data from the three-year
period 2005–07 in order to take into account the annual variability both in agricultural
prices <strong>and</strong> the policies involved. Commission staff also considered products for which the
share <strong>of</strong> U.S. exports in <strong>India</strong>n imports is unusually low relative to the share <strong>of</strong> U.S.
exports in other markets or for which <strong>India</strong>n imports are effectively zero. Second, among
those products identified in the first step, Commission staff distinguished those products
for which staff was able to document <strong>India</strong>n NTMs that restrict imports. These products
include corn <strong>and</strong> other cereal grains, pork <strong>and</strong> poultry, dairy products, wine, <strong>and</strong> leather
products, which have positive NTM price gaps, <strong>and</strong> wheat, for which U.S. exports to the
85 As noted below, the estimates <strong>of</strong> NTM price gaps make use <strong>of</strong> data from the three-year period from
2005 to 2007. The policies mentioned are applied in different ways in different years. All <strong>of</strong> the policies
mentioned may not have been applied to all <strong>of</strong> the products in question in each <strong>of</strong> the three years, or
subsequently. For example, as noted, certain policies pertaining to hides <strong>and</strong> skins (leather products) were
relaxed in 2009.
86 These price gaps are estimated at the Harmonized System (HS) six-digit subheading level. Separate
price gaps are estimated for U.S. exports to <strong>India</strong> <strong>and</strong> rest-<strong>of</strong>-world exports to <strong>India</strong>. Estimates <strong>of</strong> economic
effects are presented at the GTAP sector level <strong>and</strong> not the HS six-digit subheading level for computational
reasons. See appendix H.
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