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The Doha round Agricultural Tariff-cutting Formulae and Tariff Escalation
| Content Provider | Semantic Scholar |
|---|---|
| Author | Sharma, Rajnish Morrison, J. A. E. Sarris, Alexander H. |
| Copyright Year | 2006 |
| Abstract | Tariff escalation, the phenomenon where tariffs rise along the processing chain, is a longstanding market access issue, especially for the developing countries in view of the urgency for them to develop value-adding, processing industries. In the ongoing agricultural negotiations, there is an agreement among the WTO Members to “effectively” address the issue. How this is going to be done, however, has not as yet been discussed in a concrete manner. With the objective of contributing technical inputs to this process, this study quantifies, for selected product pairs and markets, changes in tariff escalation following the application of three recent tariff-cutting formulae as proposed by the G-20, EU and the US, and discusses some negotiating options. On the former, it finds that all three tariff-cutting formulae reduce tariff escalation considerably, but do not eliminate the gaps. On the question of how tariff escalation may be addressed in the negotiations, over and above the reductions resulting from the formula cuts, the analysis finds that agreements have to be reached on two key building blocks. One, whatever formula is identified, a listing of processed products and their corresponding primary products is required for applying the formula. These could be 20-25 processed products, about 100 tariff lines, and about 150-200 tariff lines for the corresponding primary products. Two, an agreement would be needed on a threshold, or a de minimis level, within which to contain the tariff escalation for the products identified. The de minimis level could be, for example, 5 percentage points of tariff wedge between primary and processed products for the developed countries and 10 percentage points for the developing countries. It will then be relatively straightforward to determine the required adjustment factors for tariff reduction rates, over and above the formula rates. An alternative idea, to negotiate a single adjustment factor or a multiple, as proposed in the 2003 Harbinson text, is found to be fraught with technical problems. |
| Starting Page | 129 |
| Ending Page | 146 |
| Page Count | 18 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.fao.org/fileadmin/templates/loge/Speeches_and_statements/BackroundPapers/Tariff_escalation_-_Sharma_-_Jan_2006b.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
