THE DERIVED DEMAND FOR IMPORTED CHEESE IN HONG KONG

The objective of this paper was to provide the U.S. dairy industry with empirical estimates of Hong Kong's derived demand for imported cheese differentiated by source country of production. These estimates were used to simulate the effects of European Union (EU) subsidy reductions on the U.S. share of Hong Kong cheese imports. Simulation results suggested that Oceania was the primary beneficiary from EU subsidy reductions. Hong Kong cheese imports from the U.S. were expected to increase by 12% if subsidy reductions continue at the same pace as the 1994 GATT agreement and 21% if reductions were twice the pace.