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Agricultural Market Access

Agricultural Market Access. by David Laborde , Will Martin and Dominique van der Mensbrugghe In Unfinished Business? The WTO’s Doha Agenda Edited by Will Martin and Aaditya Mattoo. Agricultural market access. Tiered formula to cut bound tariffs

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Agricultural Market Access

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  1. Agricultural Market Access by David Laborde, Will Martin and Dominique van derMensbrugghe In Unfinished Business? The WTO’s Doha Agenda Edited by Will Martin and AadityaMattoo

  2. Agricultural market access • Tiered formula to cut bound tariffs • Different coefficients for developed & developing countries • Wider bands & smaller cuts in developing countries • Flexibilities • Sensitive products for all countries • 4% of tariff lines in developed ctries; 5.3% in developing • Assume cuts reduced by one third • Special products for developing countries • 14% of lines; 40% no cut; average-cut of 11%

  3. Tiered Formula for Agriculture

  4. Agric cuts & final tariffs, %

  5. Selection for product flexibilities • Highest-tariff rule frequently used • No conceptual basis • Highest bound tariff includes many products with huge binding overhang and no need to cut • Many of the highest applied tariffs are on minor products • Suggests adverse impacts of flexibilities on average tariffs are very small • Largest trade share may overstate losses • Use Grossman-Helpman political preference function • Assume original tariffs reflect political-economy equilibrium • Countries select sensitive prods to minimize political costs • Get more plausible product lists; large impacts on efficiency; not so large on market access • Intuition– countries choose products with large imports, and where large , politically-costly reductions in applied rates are required

  6. Changing # of sensitive products

  7. Cuts in agricultural tariffs, %

  8. Cuts in agricultural tariffs faced, %

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