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WTO Negociations on Market Access in Agriculture: a Comparison of alternative Tariff Cut Proposals for the EU and the US

  • Jean-Christophe Bureau
  • Luca Salvatici

This paper provides a summary measure of the possible new commitments in the area of agricultural market access undertaken by the European Union and the United States, using the Trade Restrictiveness Index (TRI) as the tariff aggregator. Indicators such as the TRI, based on welfare theory, integrate economic behavioural assumptions within a balance of trade framework. We take the 2000 bound tariffs as the starting point and attempt to assess how much liberalisation in agriculture could be achieved in the European Union and the United States as a result of the present negotiations. We compute the index for 20 agricultural commodity aggregates under the actual commitments of the Uruguay Round assuming a specific (Constant Elasticity of Substitution) functional form for import demand. Then, we estimate the deadweight losses implied by each tariff structure in order to assess the benefits of future trade agreements in terms of increased efficiency. We compare the present levels of the TRI with three hypothetical cases: a repetition of the same set of tariff cuts commitments of the Uruguay Round according to the EU proposal, a uniform 36 percent reduction of each tariff, an harmonization ("Swiss") formula based on the US proposal.

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Paper provided by INRA, Economie Publique in its series Working Papers with number 2003/03.

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Date of creation: 01 Oct 2003
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Handle: RePEc:apu:wpaper:2003/03
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  1. McDaniel, Christine A. & Balistreri, Edward J., 2002. "A Discussion on Armington Trade Substitution Elasticities," Working Papers 15856, United States International Trade Commission, Office of Economics.
  2. Luca Salvatici, 2001. "Trade Distortion Indexes and Applied General Equilibrium Models: The Case of the Common Agricoltural Policy," Working Papers 45, University of Rome La Sapienza, Department of Public Economics.
  3. James E. Anderson & J. Peter Neary, 1999. "The Mercantilist Index of Trade Policy," NBER Working Papers 6870, National Bureau of Economic Research, Inc.
  4. J. P. Neary, 1997. "Pitfalls in the theory of international trade policy: concertina reforms of tariffs and subsidies to high technology industries," LSE Research Online Documents on Economics 20341, London School of Economics and Political Science, LSE Library.
  5. Anderson, James E & Neary, J Peter, 1996. "A New Approach to Evaluating Trade Policy," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 107-25, January.
  6. Hatta, Tatsuo, 1977. "A Theory of Piecemeal Policy Recommendations," Review of Economic Studies, Wiley Blackwell, vol. 44(1), pages 1-21, February.
  7. J-C Bureau & L Fulponi & L Salvatici, 2000. "Comparing EU and US trade liberalisation under the Uruguay Round Agreement on Agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(3), pages 259-280, September.
  8. Diao, Xinshen & Elbehri, Aziz & Gehlhar, Mark J. & Gibson, Paul R. & Leetmaa, Susan E. & Mitchell, Lorraine & Nelson, Frederick J. & Nimon, R. Wesley & Normile, Mary Anne & Roe, Terry L. & Shapouri, S, 2001. "Agricultural Policy Reform In The Wto: The Road Ahead," Agricultural Economics Reports 34015, United States Department of Agriculture, Economic Research Service.
  9. John C. Beghin & Jean-Christophe Bureau, 2001. "Quantitative Policy Analysis of Sanitary, Phytosanitary and Technical Barriers to Trade," Economie Internationale, CEPII research center, issue 87, pages 107-130.
  10. Lloyd, P J, 1975. "Substitution Effects and Biases in Nontrue Price Indices," American Economic Review, American Economic Association, vol. 65(3), pages 301-13, June.
  11. Hugh M. Arce & Kenneth A. Reinert, 1994. "Aggregation and the Welfare Analysis of US Tariffs," Journal of Economic Studies, Emerald Group Publishing, vol. 21(6), pages 26-30, October.
  12. Bach, Christian F. & Martin, Will, 2001. "Would the right tariff aggregator for policy analysis please stand up?," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 621-635, August.
  13. Gibson, Paul R. & Wainio, John & Whitley, Daniel B. & Bohman, Mary, 2001. "Profiles Of Tariffs In Global Agricultural Markets," Agricultural Economics Reports 34055, United States Department of Agriculture, Economic Research Service.
  14. Patrick A. Messerlin, 2001. "Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 102, December.
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