Comparing the effects of different approaches to liberalising world grains markets
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The success of the current Doha Round of the WTO negotiations on agriculture
will require substantial reform in each of the three areas of market access, export
subsidies and domestic support. Substantial improvement in market access for
agricultural products will be an essential requirement for achieving a successful
outcome. However, the extent of improvement in market access resulting from the
current negotiations will largely depend on the form and the approach followed to
reduce tariffs and expand tariff rate quotas.
In this paper different approaches to expanding market access for grains area
analysed using a partial equilibrium model. Simulated scenarios include linear
reductions in applied tariffs and expansions in tariff rate quotas, which are
contrasted with a scenario representing market access proposals of the Cairns
Group of countries in the current WTO agricultural negotiations.
The effects of these two trade liberalisation scenarios on world prices and trade
are analysed and discussed. Results indicate that to achieve a meaningful gain in
market access for grains, WTO members must agree to either directly reduce the
current applied tariffs or make large percentage reductions to the WTO bound
rates, which lead to effective reductions in the current applied rates.