The US Tariff-Rate Quota System for CheeseA tariff-rate quota (TRQ) is a two-tier tariff. The Uruguay Round Agreement on Agriculture provides for the transformation of remaining import quotas into TRQs in order to eliminate quantity restricting import barriers to trade. However, more often than not are TRQs de-facto-quotas. The profit-maximizing condition for an importer confronted with two differentiated goods under a common quota is derived. The main focus of the present article is the US import regime for cheese which was transformed according to the tariffication process into a TRQ system. Analysis of cheese import quantities shows that this transformation has indeed little changed. Being the only remarkable exception in partially overcoming the import barriers, the case of New Zealand indicates a possible price discrimination in favor of high-duty imports.
