Title: Market Access
Published in: Trade Issues
Author/s: Jales, Mario; Josling, Tim; Nassar, Andre; Tutwiler, Ann
Number: TPI 2
The negotiation of improved market access in agriculture is crucial to the success of the Doha Round. The depth of tariff cuts will be the main indication of the level of ambition of the agricultural talks and hence the Round as a whole. Agricultural tariffs remain five times higher than tariffs in industrial goods, and account for the bulk of the distortions in agricultural trade. Recent analysis indicates that 92 percent of the global gains from trade liberalization in agriculture result from removing market access barriers. The July Framework reaffirmed the objective of substantial improvements in market access. This is to be accomplished by a single approach, a tiered (or banded) formula for tariff cuts, with the higher tariff rates being subject to the highest cuts. Negotiations have centered on how many bands to select, where to place the thresholds, and how progressive to make the band-specific reductions. The issue of whether to impose a tariff cap was left undecided in the Framework Agreement. Tariff caps have the advantage of reducing tariffs that are so high that they are little different from an import ban. If the cap is set at a low enough level, real trade improvements may follow. The Framework Agreement specifies that each Member may identify in the schedule a number of products as “Sensitive Products.” However, analysis has shown that even exempting as little as two percent of tariff lines from formula based cuts would substantially reduce the expected gains from market access improvements. This points up the need for significant increases in TRQs for Sensitive Products to achieve significant improvements in market access.