Alternative Market Access Scenarios in the Agricultural Trade Negotiations of the Doha Round

Abstract

The paper explores an important issue in multilateral agricultural trade negotiations, namely the approach taken to reduce tariffs, simulating possible liberalization scenarios. The analysis is based on the model of the Global Trade Analysis Project (GTAP), and on the related version 6.0 database. Scenarios are run on a 2013 baseline, built by taking into account a number of events that have affected (and will further affect) world agricultural markets up to that period, focusing on the effects that are specifically attributable to further trade liberalization in the Doha Round. The policy strategies analyzed are two hypothetical liberalization scenarios in terms of market access and export competition, plus a free agricultural trade benchmark scenario. More specifically, in terms of market access we compare proportional cuts in tariffs with a Swiss-formula approach. Over the range of formula parameters considered here, we find that the impacts are not greatly influenced by the extent to which higher tariffs face bigger cuts. Results indicate that welfare gains could be reaped both by developed and developing countries, but only the possibility of inter-country compensations would allow, at least in principle, an agreement to be reached.

Keywords: Commercial Policy, Protection, Trade Negotiations, Agriculture in International Trade

JEL Classification: F13, Q17