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Formulas and flexibility in trade negotiations : sensitive agricultural products in the WTO's Doha agenda

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  • Jean, Sebastien
  • Laborde, David
  • Martin, Will

Abstract

Many trade negotiations involve large cuts in high tariffs, with flexibilities allowing much smaller cuts for an agreed number of politically-sensitive products. The effects of these flexibilities on market access opportunities are difficult to predict, creating particular problems for developing countries in assessing whether to support a proposed agreement. Some widely-used ad hoc approaches to identifying likely sensitive products -- such as the highest-bound-tariff rule -- suggest that the impacts of a limited number of such exceptions on average tariffs and on market access are likely to be minor. This paper uses a rigorous specification based on the apparent objectives of policy makers in setting the pre-negotiation tariff. Applying this approach with detailed data allows the authors to assess the implications of sensitive-product provisions for average agricultural tariffs, economic welfare, and market access under the Doha negotiations. The authors conclude that highest-tariff rules are likely to seriously underestimate the impacts on average tariffs, and that treating even 2 percent of tariff lines as sensitive is likely to have a sharply adverse impact on economic welfare. The impacts on market access are also adverse, but much smaller, perhaps reflecting the mercantilist focus of the negotiating process.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5200.

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Date of creation: 01 Feb 2010
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Handle: RePEc:wbk:wbrwps:5200

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Related research

Keywords: Free Trade; International Trade and Trade Rules; Markets and Market Access; Debt Markets; Trade Policy;

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Cited by:
  1. Hoekman, Bernard & Martin, Will & Mattoo, Aaditya, 2010. "Conclude Doha: It Matters!," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7788, C.E.P.R. Discussion Papers.
  2. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 28(2), pages 235-260, SUMMER.
  3. Burrell, Alison M. & Ferrari, Emanuele & Mallado, Aida Gonzalez & Michalek, Jerzy, 2012. "EU market access for agricultural products in the Doha Development Round: A sensitive issue," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 126950, International Association of Agricultural Economists.
  4. Listorti, Giulia & Kempen, Markus & Girardin, Jean & Kranzlein, Tim, 2011. "Do Price Uncertainties Affect the Use of Policy Flexibilities? The Selection of Sensitive Products in WTO Agricultural Negotiations," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 114381, European Association of Agricultural Economists.
  5. Christophe Gouel & Cristina Mitaritonna & Maria Priscila Ramos, 2010. "The Art of Exceptions: Sensitive Products in the Doha Negotiations," Working Papers 2010-20, CEPII research center.

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