MARKET ACCESS:
The Key to Expanding Developing Country Trade
The Doha Mandate calls for
substantial improvements in
market access.
Where tariff quotas are in place they are
often for only minimal quantities compared
to consumption levels.
> For example, the EU’s tariff quotas on
cheese and chicken amount to less than
2 per cent of EU domestic consumption
of these products
Market access barriers are the major tool of
protection.
Tariff escalation is also a major concern for
developing countries.
> Substantial reductions in trade distorting
support and the elimination of export
subsidies will not be enough to remove
the competitive disadvantage suffered by
developing country producers
> Cocoa bean farmers can export beans to
Japan and the EU duty free.
> More than 90% of the global costs of
protection are estimated to come from
market access barriers through tariffs
> But the same farmers setting up a factory
to process and export cocoa powder will
face tariffs of up to 30 per cent in Japan
or up to 66 per cent* in the EU,
depending on sugar content.
Developing countries face tariffs in developed
countries on staples such as rice, meat, sugar
and tropical products many times higher than
those on industrial goods.
> For example, the EU's tariff on frozen
boneless chicken cuts is estimated to be
88 per cent and Japan’s tariff on cassava
starch is approximately 583 per cent.*
Market Access Barriers in the Global Rice Market
High import tariffs, tariff quotas and other market access barriers in key importing countries are
the cause of major distortions in world rice markets.
Bound rice tariffs in Japan, expressed in ad valorem form, are a staggering 777 per cent.*
The Republic of Korea continues to impose a highly restrictive quantitative limit on rice
imports - 306,963 tonnes in 2009, expanding to 408,698 tonnes by 2014 – about 8 per cent
of domestic consumption.
Tariff escalation (from paddy to milled rice) is systematically practiced in many countries
> The EU has a 211 €/t applied tariff on paddy rice, 254 €/t on brown rice and
416 €/t for milled rice
> This pattern of protection depresses world prices for milled high-quality rice relative to
prices for brown and rough rice, creating economic hardship for millers of high-quality rice
in exporting countries such as Thailand and Vietnam.
* Based on ad valorem equivalents submitted to the WTO in 2005.
Benefits of global trade reform
Trade is about comparative advantage. Since many developing countries have a strong
comparative advantage in agriculture, there is potential to export far more if market access
barriers are reduced.
For developing countries, reducing or removing their own market access barriers can provide
a significant boost to economic growth and help alleviate poverty by
> providing clearer market signals showing trade opportunities,
>
promoting more efficient resource allocation,
>
allowing greater access to imports, and
>
increasing food availability.
A World Bank study found that developing economies which sizeably increased their ratio of
trade to GDP and significantly reduced their import tariffs, grew more than three and a half
times faster than those developing economies that did not
>
an average of 60 % of prospective gains from global trade reform would come from
agriculture and food policy reforms, with prospective welfare gains for developing
countries being estimated at 83% on a GDP basis.
Concluding the Doha Round could deliver:
Substantial improvements in market access:
>
a tiered tariff formula, ensuring the highest tariffs are cut the most.
> top-tier tariff cuts of 70% for developed countries - a significant achievement
> A minimum average tariff cut of 54% for developed countries and a maximum
36% cut for developing countries.
Tiered formula for Tariff Reductions
Developed Countries
Developing Countries
(5 yr implementation – equal instalments)
(10 yr implementation – equal instalments)
Tariff Thresholds %
0 ≤ 20
> 20 ≤ 50
> 50 ≤ 75
> 75
Proposed Cuts
50%
57%
64%
70%
Tariff Thresholds %
0 ≤ 30
> 30 ≤ 80
> 80 ≤ 130
> 130
Proposed Cuts
33.3%
38%
42.6%
46.6%
>
Full elimination of the Special Agricultural Safeguard (SSG) for developed countries
>
Improved market access for sensitive products, achieved through a combination of
tariff quota expansion and tariff reductions.
>
Special and differential treatment for developing countries including lower
tariff reductions, longer implementation periods, flexibility for “special products”
and a special safeguard mechanism.
For more information visit http://www.cairnsgroup.org
Members of the Cairns Group are: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala,
Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa,Thailand and Uruguay.