Redistributive Implications of a Tariff-rate Quota Policy: How Market Structure and Conduct Matter

Abstract

Under the Common European Banana Policy, a tariff-rate quota system was introduced on the EU market. The EU market had been governed by very different regulations prior to the new policy, and the most liberal situation had existed in Germany with a free-trade situation. It was the objective of this paper to analyze theoretically and empirically the price, trade and welfare impacts of the European banana trade regime on the German banana market. As the market may have been competitive or imperfectly competitive in the situation without policy, the influence of market structure and conduct on the policy impacts has been elaborated. Furthermore, it was tested empirically which market conduct existed in the situation before the policy change.