CEPII, Recherche et Expertise sur l'economie mondiale
Choosing Sensitive Agricultural Products in Trade Negotiations

Sébastien Jean
David Laborde
Will Martin

 Highlights :

 Abstract :
The formula approach used in many trade negotiations involves large formula cuts in high tariffs, with flexibilities that allow smaller cuts for selected products. Difficulties in evaluating the effects of these exceptions can create major problems. We use a politicaleconomy welfare function and detailed data on the current WTO agricultural negotiations to assess the implications of this approach for welfare and for market access. We find that some previous rules of thumb greatly underestimate the impacts of such exceptions. Indeed, treating even a small number of tariff lines as sensitive and subjecting them to reduced cuts has a sharply adverse impact on welfare, and a smaller but still negative impact on market access.

 Keywords : Agricultural trade | Trade negotiations | Market access | Sensitive products | WTO

 JEL : F13, P16, Q17
CEPII Working Paper
N°2008-18, September 2008

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 Fields of expertise

Trade & Globalization