Trade Policy Reforms and Development

Trade Policy Reforms and Development

Essays in Honour of Peter Lloyd, Volume II

Edited by Sisira Jayasuriya

Trade Policy Reforms and Development, comprises 11 essays offering new contributions on the following topics: globalisation and political economy of trade; trade, labour standards and economic crisis; the changing role of the WTO; competition policy and the WTO; choice of formulas for market access negotiations; regionalism and bilateralism in ASEAN; ANZUS free trade agreement; new criteria for optimum currency areas; trade policy and poverty in Asia; impact of agricultural trade reforms on poverty; and recent behaviour of US imports.

Chapter 5: Choosing formulas for market access negotiations: efficiency and market access considerations

Joseph Francois, Will Martin and Vlad Manole

Subjects: economics and finance, international economics


5. Choosing formulas for market access negotiations: efficiency and market access considerations Joseph Francois, Will Martin and Vlad Manole* 1. INTRODUCTION There is a now a clear understanding that there are wide divergences between the broad approaches to tariff reduction initially proposed by different participants in the Doha Development Agenda. In his overview of the agricultural negotiations, Stuart Harbinson (WTO, 2003a) emphasized the wide divergence between the Uruguay Round approach to tariff reduction favoured by Switzerland, Europe and Japan, and the more strongly top-down Swiss formula favoured by Uruguay, other Cairns Group members and the USA. He asked whether there were alternative views that might be used to form a basis for a compromise between the two approaches. In the negotiations on non-agricultural market access, the draft declaration for the ill-fated Cancun Ministerial moved away from earlier proposals involving a Swiss formula for non-agricultural market access, instead calling for delegates to seek a ‘non-linear’ tariff reduction formula to be determined (WTO, 2003d). There seems to be broad agreement in the Doha Development Agenda negotiations on the desirability of a formula-based approach to tariff reductions, and many different formulas have been proposed. Some of these approaches – such as the Uruguay Round approach to agricultural tariff reduction – allow discretion in assigning tariff cuts at the individual tariff-line level. Others are specified on a line-by-line basis, removing policy makers’ discretion at the individual product level. A major difficulty in comparing the different formulas under consideration is...

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