Agricultural Policy Reform: Politics and Process in the Eu and Us in the 1990s by H. Wayne Moyer

Author:H. Wayne Moyer [Moyer, H. Wayne]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9780754630500
Google: 9oRHDwAAQBAJ
Goodreads: 990775
Publisher: Ashgate Publishing
Published: 2002-12-01T00:00:00+00:00

7.7 Market Access

Perhaps the most far-reaching element in the Agreement was the change in the rules regarding market access. With a few temporary derogations, all participating countries agreed to convert all existing non-tariff barriers (along with unbound tariffs) into bound duties and not to introduce new non-tariff measures. The new bound tariffs, as well as tariffs bound earlier, were to be reduced by 36 percent over the six-year implementation period (1995 to 2000), on a simple (unweighted) average basis, with a minimum rate of reduction of 15 percent for each tariff line. The agreement to convert all non-tariff import barriers to bound tariffs took agricultural trade a big step toward the treatment of manufactures within the GATT. It also represented a major constraint on the operation of domestic policy instruments.105

Domestic policies and trade policies act in tandem to support domestic markets and increase farm receipts. Border measures are needed to prevent imports from undercutting national markets. Domestic measures traditionally have focused on the marketing of the domestic crop or livestock product, either fixing a price at which public or private agents buy from farmers or controlling supplies on to the market to raise the price. But fixing a domestic price is of little use if consumers can merely buy from abroad. Border controls are therefore needed as a backup to the domestic price policy. Controlling quantities similarly is ineffective in raising price if imports can come in to substitute for domestic production. Once again the control at the border is an important part of the policy. Free trade would obviously limit the use of domestic price policies and render domestic quantity controls ineffectual. A fixed tariff has a less dramatic impact but moves in the same direction. It limits the effectiveness of both price-fixing policies and quantity-control instruments. The introduction of fixed tariffs in the URAA effectively puts a limit on domestic price policies and a strong constraint on the usefulness of quantity control policies. The full impact of these constraints will not be felt until the level of tariffs is reduced to a much lower level, in subsequent rounds of WTO negotiations. But the fact that the rule has been established has changed permanently the context in which domestic agricultural policy is formulated. The linkage between market access and domestic policy has other aspects. To secure minimum trade gains when tariffs were bound at prohibitively high levels, and to counter the ability of state trading import agencies to restrict trade, the agreement provided in cases of tariffication for "minimum access opportunities", generally a share of the domestic market rising from 3 percent to 5 percent of consumption. The introduction of so-called Tariff Rate Quotas (TRQs) was intended to provide for this access, as well as to ensure continued access for pre-existing quotas where exporters enjoyed preferential market access in the past. Although importation of these minimum quantities was not guaranteed, to ensure an incentive to fill these quotas, "low or minimal duties" were to be charged on these imports. The impact on domestic policy varies by commodity.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.