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Tariff Bindings, Unused Protection and Agricultural Trade Liberalisation

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  • Peter Walkenhorst
  • Nora Dihel

Abstract

Prior quantitative assessments of the effects of agricultural trade liberalisation have assumed that negotiated reductions in bound tariffs translate into corresponding cuts in applied tariff rates. This approach, however, overestimates the actual reduction in applied tariffs and, hence, the benefits of trade liberalisation, since applied rates are often much lower than the tariffs bound in Uruguay Round schedules. This paper uses data on applied and bound tariffs and the GTAP-CGE model to quantify the magnitude of the resulting bias. The findings suggest that the distortion of estimates is particularly pronounced for modest tariff cuts, as well as for countries where the differences between bound and applied rates are substantial. Hence, quantitative policy analysts who aim to inform decision makers on the likely impacts of negotiated tariff cuts should consider the relationship between bound and applied tariff rates in their assessments in order to avoid mistaken advice...

Suggested Citation

  • Peter Walkenhorst & Nora Dihel, 2003. "Tariff Bindings, Unused Protection and Agricultural Trade Liberalisation," OECD Economic Studies, OECD Publishing, vol. 2003(1), pages 231-249.
  • Handle: RePEc:oec:ecokaa:5lmqcr2jgw22
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    File URL: http://dx.doi.org/10.1787/eco_studies-v2003-art6-en
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    Cited by:

    1. Lips, Markus, 2004. "The Cap Mid Term Review And The Wto Doha Round; Analyses For The Netherlands, Eu And Accession Countries," Report Series 29092, Agricultural Economics Research Institute.
    2. Mohamed Hedi Bchir & Sébastien Jean & David Laborde, 2006. "Binding Overhang and Tariff-Cutting Formulas," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 207-232, July.
    3. Oyewumi, Olubukola Ayodeju, 2005. "Modeling tariff rate quotas in the South African livestock industry," Master's Degree Theses 28064, University of the Free State, Department of Agricultural Economics.
    4. Brockmeier, Martina & Pelikan, Janine, 2006. "Agricultural Market Access: A Moving Target in the WTO Negotiations?," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25428, International Association of Agricultural Economists.
    5. Martina Brockmeier & Janine Pelikan, 2006. "A Portfolio Theory of International Capital Flows," The Institute for International Integration Studies Discussion Paper Series iiisdp125, IIIS.
    6. Davide Sala & Philipp J. H. Schröder & Erdal Yalcin, 2010. "Market Access Through Bound Tariffs," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(s1), pages 272-289, July.
    7. Yvan Decreux & Lionel Fontagné, 2006. "A Quantitative Assessment of the Outcome of the Doha Development Agenda," Working Papers 2006-10, CEPII research center.
    8. Oyewumi, Olubukola Ayodeju & Jooste, Andre & Britz, Wolfgang & van Schalkwyk, Herman D., 2007. "Tariff and Tariff Rate Quota Liberalization in the South African Livestock Industry: Approaches to Welfare Measurement," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(1), March.
    9. Pascal Ghazalian & Ryan Cardwell, 2010. "Did the Uruguay Round Agreement on Agriculture Affect Trade Flows? An Empirical Investigation for Meat Commodities," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(4), pages 331-344, November.
    10. Martina Brockmeier & Marianne Kurzweil & Janine Pelikan, 2006. "Agricultural Market Access: Striking the Balance between Formulas and Water in the Tariffs," ENARPRI Working Papers 018, ENARPRI (European Network of Agricultural and Rural Policy Research Institutes).
    11. repec:kap:iaecre:v:16:y:2010:i:4:p:331-344 is not listed on IDEAS
    12. Tom Achterbosch & Hakim Ben Hammouda & Patrick Osakwe & Frank van Tongeren, 2004. "Trade liberalisation under the Doha Development Agenda Options and consequences for Africa," International Trade 0407013, EconWPA.

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