L19Nov09.306

L19Nov09.306 - Lec 20: Agricultural Trading Arrangements...

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Lec 20: Agricultural Trading Arrangements FRE 306
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Agricultural Trade Discussions and Negotiations: 3 main areas Market Access What are the trade restrictions on imports; reduce tariffs and other barriers Deal w/ over-TRQ mega-tariffs (TRQ=Tariff Rate Quota) Export Subsidies Reduce and ultimately prohibit export subsidies Special focus on US and EU Domestic Support Reduce subsidies that affect trade (amber and green box support; especially reduce amber box support) 2 Lec 19: Agricultural Trading Arrangements
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Results of URA for Agriculture Uruguay Round Agreement (URA) was first comprehensive attempt to bring agriculture into world trading system, with set of rules for all, fairer competition and less distorted world trade Obj: improve predictability, security for X, M countries Reduce trade barriers, apply “normal” rules to Ag trade Governments can still support rural economies, but through policies that cause less distortion to trade Some flexibility in how commitments implemented (LDCs vs DCs, mainly for food importing LDCs) 3 Lec 19: Agricultural Trading Arrangements
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Market Access Rules First rule: Tariffs only, please All non-tariff barriers to be replaced by tariffs that provide equivalent protection. How to calculate equiv. protection? If old measures meant domestic prices were 75% above world prices, then new tariff could be 75% Most non-tariff barriers were import quotas or relied heavily on import quotas or prohibitions (quota=0) In addition, some import access must be allowed by all countries, at least 5% of consumption or previous level Incorporated in set of Tariff Rate Quotas (TRQs) Normally, lower tariffs for imports within TRQ, then higher tariffs for imports above that quota level E.g., 10% tariff up to TRQ=100 tons, 80% tariff for imports above the initial 100 tons (the 80% determined by tariffication process) 4 Lec 19: Agricultural Trading Arrangements
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L19Nov09.306 - Lec 20: Agricultural Trading Arrangements...

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