Tariff Elimination and the Competitiveness of Wine-Exporting Countries in Japan

Abstract Bilateral trade agreements between Japan and major wine-exporting countries have resulted in tariff eliminations in Japan. This raises questions about how tariffs affect the competitiveness of wine-exporting countries. The generalized dynamic Rotterdam model was used in estimating Japanese wine demand by source. Estimates were then used to project the impact of tariffs on imports of Australian, Chilean, French, German, Italian, Spanish, and U.S. wine. Tariff reductions primarily benefit affected countries, with limited adverse effects on competing countries. The elimination of tariffs on U.S. wine should offset any losses from competing trade agreements.