| This study is an attempt to re-evaluate existing measures of trade protection and empirically investigate new ones in search of measures that aggregate satisfactorily diverse sets of trade distortions and provide a valid estimation of trade restrictiveness across countries and over time. A review of the existing literature reveals that, from a methodological point of view, the Trade Restrictiveness Index (TRI), has some clear advantages over the rest of the trade protection measures.The study implements the TRI by investigating the overall restrictiveness of a subset of Japan's agricultural policies. The level of trade protection is measured, ceteris paribus, by means of the TRI for the following farm products: (1) beef, (2) pork, (3) poultry, (4) wheat, (5) rice, and (6) fresh oranges. The computed index indicates a dramatic rise in trade protection in the early 1970s, followed by a slow process of easing price and quantity restrictions so that a slight trade liberalization trend appears towards the end of the examined period.This study also attempts a generalization of the standard TRI by deriving the index in the presence of different sets of traded goods over time. Under the maintained assumption of a C.E.S. welfare function, it is shown that when newly traded goods are introduced over time, the standard TRI is adjusted by a factor that depends on the relative expenditure value of the new goods, and the elasticity of substitution of the underlying C.E.S. welfare function. This generalized version of the TRI is empirically investigated by calculating a partial TRI pertaining to Japanese meat imports under the maintained hypothesis that beef imports are differentiated products, distinguished by origin (supplier country). The standard TRI is adjusted in 1969 to account for the introduction of U.S. beef in the Japanese meat market. This exercise shows that the TRI may be shaped by both policy changes and cross-commodity effects and as a result the adjustment in the generalized TRI may be either upwards or downwards. |
