Title: EU market access for agricultural products in the Doha Development Round: A sensitive issue
Citation: 28th International Conference of Agricultural Economists p. 1-18
Publisher: International Association of Agricultural Economists
Publication Year: 2012
JRC N°: JRC72136
URI: http://purl.umn.edu/126950
Type: Articles in periodicals and books
Abstract: This paper examines how EU trade flows and production values are affected by introducing special treatment for developed countries’ sensitive products into a potential DDA agreement. In particular, it explores how the EU’s decisions regarding the size of the tariff cut (1/3, ½ or 2/3 of the cut according to the tiered formula of the Revised Draft Modalities (WTO, 2008a)) and the corresponding size of TRQ expansion affect its levels of protection for individual products, as well as its own GDP and that of other countries and regions. It is assumed that the EU’s management of its sensitive product regime is motivated by the objective of maintaining farm incomes and production values, rather than that of minimising import access per se. A novelty of the paper is that it explores the extent to which optimal decisions by the EU depend on similar decisions taken by other developed countries, and aims to identify dominant strategies that are independent of other countries’ choice of market access parameters for their sensitive products. The simulation tool used to analyse thirteen scenarios, with a time horizon of 2020, is the global Computable General Equilibrium model GLOBE. The model incorporates various important developments in CGE trade modelling from the last 15 years (e.g. inclusion of preferential agreements, bilateral and multilateral TRQ, split of quota rents, flexible closure rules, etc.), and is calibrated with data from the Global Trade Analysis Project’s (GTAP) database version 7.1. Our results indicate that the chosen combination of tariff cut and TRQ expansion for sensitive products matters, and the lowest tariff cuts for sensitive products may not necessary lead to the smallest decrease in agricultural production. Moreover, the interdependencies between the sensitive product choices of developed countries are considerable. Insofar as the decisions of other developed countries affect EU exports for both sensitive and non-sensitive products, the net impact of the sensitive product regime on EU farm production and income depends partly on decisions beyond the control of EU decision makers. The extent to which EU management decisions relating to sensitive products matter for the impact of a DDA agreement on third countries’ GDP is also examined.
JRC Directorate:Growth and Innovation

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