摘要：This paper develops an equilibrium displacement model for simulating the effects of tariff reductions on the green tea industry in Korea. The model developed in this paper incorporates the interaction between the market of green tea of which quality is high and the market of lower quality green tea. Simulation results based on DDA tariff reduction scenarios show that the effects of tariff reductions on domestic supply and producer prices are very small in the years from 2010 to 2016. This is because the tariff of the green tea that has higher quality will remain still high at the earlier stage of tariff reduction, thus the imports of higher quality green tea will continue to be very small. The simulation results indicate that, at the final year of tariff reduction, domestic supply will be reduced by 1.8%~5.1% if the cross elasticity between domestic and imported higher quality green tea is 0.3 and by 3.5%~11.5% under the cross elasticity of 0.7.
