1. Formulas for Failure? : Were the Doha Tariff Formulas Too Ambitious for Success?
- Author
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Laborde, David and Martin, Will
- Subjects
TRADE LIBERALIZATION ,MARKET ACCESS ,CUTTING ,CONCESSIONS ,AGRICULTURAL TARIFFS ,RATE QUOTAS ,DEVELOPING COUNTRY ,WORLD TRADE ,COMMODITIES ,ECONOMIC WELFARE ,PRICE EFFECTS ,BENEFICIARIES ,INSTRUMENT ,TRADE NEGOTIATIONS ,LACK OF TRANSPARENCY ,SALE ,TARIFF RATE ,AGRICULTURAL INTERESTS ,PROTECTION FOR SALE ,OPTIONS ,GUARANTEE ,INTERNATIONAL AGREEMENT ,GOODS ,AGRICULTURAL MARKETS ,COTTON ,TARIFF REDUCTIONS ,AGRICULTURAL TRADE ,ACCESS ,TRADE POLICY ,COMMERCIAL POLICY ,WORLD TRADE ORGANIZATION ,INTERESTS ,TRANSPARENCY ,WELFARE GAINS ,TARIFF ,AGRICULTURAL MARKET ACCESS ,TRADE ORGANIZATION ,MULTILATERAL AGREEMENTS ,MARKETS ,EXPORTERS ,PRICES ,TRADE BARRIERS ,APPLIED TARIFF ,WORLD PRICES ,AGRICULTURAL NEGOTIATIONS ,BORDER MEASURES ,HIGH TARIFFS ,MULTILATERAL REFORMS ,EXPORT ,PRODUCTS ,TARIFF STRUCTURE ,TRADE ,TARIFF NEGOTIATION ,TRADE PROTECTION ,MARKET ,MARKET ACCESS OPPORTUNITIES ,VOLUME ,MULTILATERAL TRADE ,AGRICULTURAL TARIFF ,TARIFF REVENUES ,AGRICULTURE ,PRICE CHANGE ,AGRICULTURAL MARKET ,FREE ACCESS ,DEMAND ,DEMAND CURVES ,REDUCTION IN TARIFFS ,AGRICULTURAL TRADE LIBERALIZATION ,PRODUCT ,TRADING PARTNERS ,TRADE REFORM ,POLITICAL ECONOMY ,EXCHANGE ,INTERNATIONAL ECONOMICS ,VALUE ,EXPORTS ,POLITICAL-SUPPORT ,GLOBAL TRADE ,TARIFFS ,MARKET ACCESS NEGOTIATIONS ,TARIFF CHANGES ,GOOD ,WELFARE FUNCTION ,TRADE VOLUMES ,REVENUE ,HOUSEHOLDS ,PRICE ,MULTILATERAL TRADE NEGOTIATIONS ,TARIFF CONCESSIONS ,AGRICULTURAL SECTOR ,DEMAND ELASTICITIES ,ECONOMIC POLICY ,OPTION ,IMPORTS ,DEVELOPING COUNTRIES ,INTERNATIONAL BANK ,TRADE VOLUME ,SINGLE TARIFF ,AVERAGE TARIFFS ,ECONOMIC EFFICIENCY ,AGRICULTURAL AGREEMENT ,AGRICULTURAL PRODUCTS ,INTEREST ,TRADING ,BILATERAL NEGOTIATIONS ,IMPORT VOLUMES ,TARIFF ESCALATION ,REVENUES ,TRADE EXPANSION ,MARKET ACCESS CONCESSIONS ,SHARE ,TARIFF RATES ,EXPENDITURE - Abstract
This paper views tariff-cutting formulas as a potential solution to the free-rider problem that arises when market opening is negotiated bilaterally and extended on a most-favored-nation basis. The negotiators in the Doha Agenda chose formulas that are ideal from an economic efficiency viewpoint in that they most sharply reduce the highest and most economically-costly tariffs. When the political support that gave rise to the original tariffs is considered, however, this approach appears to generate very high political costs per unit of gain in economic efficiency. The political costs associated with the formulas appear to have led to strong pressure for many, complex exceptions, which both lowered and increased uncertainty about members’ market access gains. Where tariff cuts focus on applied rates, it seems likely that a proportional cut rule would reduce the political costs of securing agreements. However, detailed examination of the Doha proposals with their product exceptions suggests that negotiators are likely to find cuts with exceptions politically attractive but economically costly when cuts are based on bound tariffs with different degrees of binding overhang.
- Published
- 2015