Net Impact of Material and Product Tariff Reduction on Food Processing Industries: An Inter-regional CGE Analysis of Processed Wheat Products

Abstract

The purpose of this study is to estimate each impact of tariff reduction in wheat and processed wheat products and judge whether an effect of cost reduction or extension of product import is superior to the other with a CGE model that enables inter-regional trade of intermediate goods. The primary outcome of the simulation is that the cost reduction effect is relatively stronger than extension of product import in flour-milling and noodle-making, opposite to the result for confectionery. In flour milling, small businesses in local regions will be squeezed out, and production will concentrate on large millers located along the coast.