Agricultural Trade Liberalisation in the 21st Century: Has It Done the Business?

Abstract

Based on a novel, detailed, time‐consistent tariff database taking account of import protection developments in the agricultural sector since 2001, we propose a statistical decomposition of the changes in the various types of tariffs. The results show that the multilateral system has played a limited role in trade liberalisation over the period. Many countries have continued to apply much lower tariffs on agricultural products than their WTO ceilings. Moreover, there has been substantial unilateral dismantling of tariffs over the period, so that much of the liberalisation took place outside WTO and regional agreements. The number of regional trade agreements has surged, but their impact on applied agricultural tariffs has been limited. Finally, we investigate the tariffs, trade and production implications for food and agricultural products of two extreme scenarios in the future development of trade negotiations: an ambitious surge of regional agreements and a trade war within the WTO context.

The Evolution of the Treatment of Agriculture in Preferential Trade Agreements

“…6 Nevertheless, in general, agriculture continues to receive special treatment in PTAs, and sensitive areas remainthe high percentage of tariff elimination belies in many cases numerous product exemptions within tariff headings, as well as the use of tariff rate quotas. Indeed, between 2001 and 2013, PTAs reportedly contributed very little to the reduction in global applied tariff protection for agricultural products (Bureau, 2017). 7 Estevadeordal, Shearer and Suominen (2009) likewise find that agricultural chapters in PTAs feature the least liberalisation with respect to tariffs, and the highest dispersion of liberalisation across agreements.…”

Global Agricultural Policy Trends: Bridging the Digital Divide

“…Multilateral regulation of digital platforms deserves a special study. Many authors, for example, J.-C. Bureau, H. Guimbard and S. Jean [15], while emphasizing the specifics of the current development stage of the global agricultural system, note the urgent need to take it into account in the activities of multilateral institutions.…”

Negotiating agricultural trade in a new policy environment

“…While tariffs can insulate producers from competitors, the costs to domestic consumers can be an incentive for unilateral liberalization. In an analysis of applied tariff rates since 2001, Bureau, Guimbard, and Jean (2018) observe that the size of the average tariff overhang has increased, which suggests that unilateral liberalization has also been a factor in declining applied rates (as opposed to cuts to applied rates that are proportionate to declines in bound rates). In the manufacturing sector, countries have unilaterally cut rates to join global value chains or to prevent being excluded by those chains (Baldwin 2011).…”

“…In the manufacturing sector, countries have unilaterally cut rates to join global value chains or to prevent being excluded by those chains (Baldwin 2011). Bureau, Guimbard, and Jean (2018) point out that the level of tariff overhang among developing and emerging countries suggests these countries have shown restraint in protecting their agriculture, compared to what they are allowed to do under WTO disciplines.…”

“…Many countries have pursued reforms through bilateral and regional preferential trade agreements (PTA). Yet the overall impact of those agreements on global agricultural tariff levels has been small because agriculture has remained largely protected, at least for many "sensitive" commodities (Bureau, Guimbard, and Jean 2018). In other words, when it comes to market access, negotiators in bilateral and regional agreements have often found it no easier to reach agreement on sensitive products than have negotiators in the DDA; they have tended to just exclude those products from consideration.…”