Transmission of Price Variability under Tariffication

Abstract

<p>Recent proposals to the General Agreement on Tariffs and Trade (GATT) have called for the conversion of all nontariff trade barriers into their equivalents and the subsequent reduction of these tariff equivalents over time. The purpose of tariffication is to provide a methodology to quantify nontariff trade barriers to make them more visible and to provide a framework within which to reduce them. Many of these barriers are designed to stabilize domestic prices by breaking the link to world prices and, thus, the link with the variable of world prices.</p>