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Formulas and Flexibility in Trade Negotiations: Sensitive Agricultural Products in the World Trade Organization's Doha Agenda

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  • Sébastien Jean
  • David Laborde
  • Will Martin

Abstract

Many trade negotiations involve large cuts in high tariffs, while allowing smaller cuts for an agreed share 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 trade agreement. Some widely used ad hoc approaches for identifying likely sensitive products—such as the highest-bound-tariff rule—suggest that the impact of a limited number of such exceptions on average tariffs and market access is likely to be minor. Applying a rigorous specification based on the apparent objectives of policymakers in setting the prenegotiation tariff enables more accurate assessment of the implications of sensitive-product provisions for average agricultural tariffs, economic welfare, and market access under the Doha negotiations. The analysis concludes 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. Copyright , Oxford University Press.

Suggested Citation

  • Sébastien Jean & David Laborde & Will Martin, 2011. "Formulas and Flexibility in Trade Negotiations: Sensitive Agricultural Products in the World Trade Organization's Doha Agenda," World Bank Economic Review, World Bank Group, vol. 24(3), pages 500-519, February.
  • Handle: RePEc:oup:wbecrv:v:24:y:2011:i:3:p:500-519
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    Cited by:

    1. Wenshou Yan, 2016. "Geographic Politics, Loss Aversion, and Trade Policy: The Case of Cotton and China," School of Economics Working Papers 2016-15, University of Adelaide, School of Economics.
    2. David Laborde & Will Martin, 2012. "Agricultural Trade: What Matters in the Doha Round?," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 265-283, August.
    3. Estrades, Carmen, 2012. "Is MERCOSUR’s External Agenda Pro-Poor?: An assessment of the European Union-MERCOSUR free-trade agreement on poverty in Uruguay applying MIRAGE," IFPRI discussion papers 1219, International Food Policy Research Institute (IFPRI).
    4. Jean-Christophe Bureau & Houssein Guimbard & Sébastien Jean, 2016. "Competing Liberalizations: Tariffs and Trade in the 21st Century," CESifo Working Paper Series 5962, CESifo Group Munich.
    5. Douillet, Mathilde, 2012. "Trade policy reforms in the new agricultural context: Is regional integration a priority for Sub-Saharan African countries agricultural-led industrialization? Insights from a global computable general," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126546, International Association of Agricultural Economists.

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