The Upstream Tariff Simulator (UTAS) : A Tool to Assess the Impact of Tariff Reform on Input Costs and Effective Protection across Sectors
Increased international production fragmentation implies that firms at home rely on imported intermediates for production. In this context, tariff policy design needs to consider the impact downstream of changes in tariffs upstream. Policy makers e...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/304221582227572364/The-Upstream-Tariff-Simulator-UTAS-A-Tool-to-Assess-the-Impact-of-Tariff-Reform-on-Input-Costs-and-Effective-Protection-across-Sectors http://hdl.handle.net/10986/33390 |
| Summary: | Increased international production
fragmentation implies that firms at home rely on imported
intermediates for production. In this context, tariff policy
design needs to consider the impact downstream of changes in
tariffs upstream. Policy makers embarking on tariff reforms
need to answer questions such as: what is the impact of
tariff changes on production costs downstream? What are the
key input tariffs that could be reduced to lower production
costs in priority sectors considering sectors' backward
linkages? Or how will a tariff rationalization plan that
focuses on tariff reductions in raw materials and
intermediates affect effective protection across sectors?
This paper presents the Upstream Tariff Simulator, a simple
Microsoft Excel–based tool designed to help policy makers
answer these questions, by combining information on tariffs
and input-output structures and allowing alternative
sectoral aggregations, and alternative market structures for
input markets. It provides the underlying conceptual
framework and a range of examples that show the insights
that the tool can provide to policy makers when analyzing
the impact of tariff reforms. |
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