2. trade agreements

410 Pages·2004·4.31 MB·English

by  World Bank Group

Agriculture
d
e
z
ri
o
h
ut T R A D E A N D D E V E L O P M E N T S E R I E S
A
e WTO
r
u AND
s Developing countries have a major stake in the outcome of trade
o
cl
Dis negotiations conducted under the auspices of the World Trade
c A
bli Organization (WTO). Agriculture and the WTO: Creating a Trading THE
u g
P System for Development explores the key issues and options in agricultural
r
trade liberalization from the perspective of these developing countries.
i
Leading experts in trade and agriculture from both developed and
c
d
rize developing countries provide key research findings and policy analyses u CREATING A TRADING SYSTEM FOR DEVELOPMENT
o
h on a range of issues that includes market access, domestic support, export
ut l
A
e competition, quota administration methods, food security, biotechnology, t
r
u
s intellectual property rights, and agricultural trade under the Uruguay
o u Editors
cl
s Round Agreement on Agriculture.
Di r Merlinda D. Ingco and John D. Nash
c
bli e
u Material is covered in summary and in comprehensive detail with supporting
P

data, a substantial bibliography, and listings of online resources. This book will a
be of interest to policymakers and analysts in the fields of development n
d
e
z economics and commodities pricing and trade.
ri d
o
h
ut
A
e t
r
u
s
o h
cl
s
Di
e
c
bli
u
P W
T
O
d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s
Di
c
bli
u
P
THE WORLD BANK
ISBN 0-8213-5485-X

Agriculture
and the WTO
Creating a Trading System
for Development

Agriculture
and the WTO
Creating a
Trading System
for Development
Merlinda D. Ingco and John D. Nash
Editors
A copublication ofthe World Bank and Oxford University Press
© 2004 The International Bank for Reconstruction and Development / The World Bank
1818 H Street,NW
Washington,DC 20433
Telephone [phone]
Internet www.worldbank.org
E-mail [email protected]
All rights reserved.
1 2 3 4 07 06 05 04
The findings,interpretations,and conclusions expressed herein are those ofthe author(s) and do not necessarily
reflect the views ofthe Board ofExecutive Directors ofthe World Bank or the governments they represent.
The World Bank does not guarantee the accuracy ofthe data included in this work. The boundaries,colors,
denominations,and other information shown on any map in this work do not imply any judgment on the part of
the World Bank concerning the legal status ofany territory or the endorsement or acceptance ofsuch boundaries.
Rights and Permissions
The material in this work is copyrighted.Copying and/or transmitting portions or all ofthis work without
permission may be a violation ofapplicable law. The World Bank encourages dissemination ofits work and will
normally grant permission promptly.
For permission to photocopy or reprint any part ofthis work,please send a request with complete information to
the Copyright Clearance Center,Inc.,222 Rosewood Drive,Danvers,MA 01923,USA,telephone [phone],
fax [phone],www.copyright.com.
All other queries on rights and licenses,including subsidiary rights,should be addressed to the Office
ofthe Publisher,World Bank,1818 H Street NW,Washington,DC 20433,USA,fax [phone],
e-mail [email protected].
Photo credits:Ship/Grain image—© Paul A.Souders/Corbis;Tomator/conveyor belt image—Willard R.
Culver/NATIONALGEOGRAPHICIMAGECOLLECTION/Getty Images.
ISBN 0-8213-5485-X
Library ofCongress Cataloging-in-Publicationdata has been applied for.
Contents
List ofBoxes vii
List ofTables viii
List ofFigures xi
Foreword xiii
Acronyms and Abbreviations xv
1. WHAT’S AT STAKE? DEVELOPING-COUNTRY INTERESTS IN THE
DOHA DEVELOPMENT ROUND 1
Merlinda D.Ingco and John D.Nash
2. TRADE AGREEMENTS:ACHIEVEMENTS AND ISSUES AHEAD 23
Merlinda D.Ingco and John Croome
3. EXPORT COMPETITION POLICIES 43
Harry de Gorter,Lilian Ruiz,and Merlinda D.Ingco
4. MARKET ACCESS:ECONOMICS AND THE EFFECTS OF POLICY INSTRUMENTS 63
Harry de Gorter,Merlinda D.Ingco,and Laura Ignacio
5. QUOTA ADMINISTRATION METHODS:ECONOMICS AND EFFECTS WITH
TRADE LIBERALIZATION 95
Harry de Gorter and Jana Hranaiova
6. DOMESTIC SUPPORT:ECONOMICS AND POLICY INSTRUMENTS 119
Harry de Gorter,Merlinda D.Ingco,and Laura Ignacio
7. THE DISTRIBUTIONAL EFFECTS OF AGRICULTURAL POLICY REFORMS 149
Harry de Gorter,Merlinda D.Ingco,and Cameron Short
8. THE “MULTIFUNCTIONALITY”OF AGRICULTURE AND ITS IMPLICATIONS
FOR POLICY 167
David Vanzetti and Els Wynen
9. FOOD SECURITY AND AGRICULTURAL TRADE POLICY REFORM 179
Merlinda D.Ingco,Donald Mitchell,and John D.Nash
10. MANAGING POTENTIAL ADVERSE IMPACTS OF AGRICULTURAL TRADE
LIBERALIZATION 193
William Foster and Alberto Valdés
v
vi Agriculture and the WTO
11. THE SANITARY AND PHYTOSANITARY AGREEMENT,FOOD SAFETY POLICIES,
AND PRODUCT ATTRIBUTES 215
Simonetta Zarrilli with Irene Musselli
12. AGRICULTURAL BIOTECHNOLOGY:A PRIMER FOR POLICYMAKERS 235
Donald J.MacKenzie and Morven A.McLean
13. GLOBAL INTELLECTUAL PROPERTY RIGHTS:A NEW FACTOR IN FARMING 253
GeoffTansey
14. RULES AND OPTIONS FOR SPECIAL AND DIFFERENTIAL TREATMENT 269
Constantine Michalopoulos
15. SPECIAL TRADE ARRANGEMENTS TO IMPROVE MARKET ACCESS 291
Helen Freeman
APPENDIX A:OECD POLICY EVALUATION MATRIX AND TRENDS IN POLICY
FOR VARIOUS COMMODITIES 317
Cameron Short and Harry de Gorter
APPENDIX B:THE AGREEMENT ON AGRICULTURE 349
INDEX 367
list of boxes
Box 1.1 The Importance ofAgriculture to Developing Countries 3
Box 1.2 The Human Face ofPolicy Incoherence 9
Box 1.3 Reforming Inefficient Support Systems:Recent Experience in Two Developing
Countries 19
Box 1.4 Cambodia Rice:Challenges to Integration 20
Box 2.1 The Price ofMultilateral Negotiations 24
Box 2.2 Uruguay Round Agreement on Agriculture:Important Documents 27
Box 3.1 Two Examples ofConsumer-Only-Financed Export Subsidy Schemes 56
Box 4.1 Transparency and Tariffication 70
Box 4.2 More on TariffQuotas 80
Box 5.1 TariffQuotas:Categories ofPrincipal Administration Methods 99
Box 5.2 TariffQuotas:Categories ofAdditional Conditions 100
Box 5.3 TariffQuotas:Economics ofFirst-Come,First-Served (FCFS) 114
Box 5.4 TariffQuotas:Factors Affecting the Impacts on Trade with an STE in Importing
Country 115
Box 6.1 The Peace Clause and Domestic Subsidies 131
Box 8.1 Aspects ofValuation 172
Box 9.1 Food Security Indicators 182
Box 10.1 Farming without Subsidies:The Experience ofNew Zealand 206
Box 11.1 The Joint FAO/WHO Codex Alimentarius Commission (CAC) 218
Box 11.2 The Office International des Epizooties (OIE) 219
Box 11.3 The International Plant Protection Convention (IPPC) 220
Box 12.1 The Global Trade Effects ofChina Bt Cotton 238
Box 13.1 The U.K.Commission on Intellectual Property Rights’Recommendations
on Agriculture and Genetic Resources 267
Box 15.1 Trade Agreements:AFTA to SADC 293
Box 15.2 A BriefHistory ofthe GSP Schemes 294
Box 15.3 The U.S.Generalized System ofPreferences (GSP) and Argentina’s Economic
Crisis,2001–02 298
Box 15.4 U.S.Generalized System ofPreferences (GSP):Criteria and Conditions 299
Box 15.5 U.S.Generalized System ofPreferences (GSP):Annual Timetable 300
Box 15.6 Parties to Regional Trade or Preferential EU Trade Agreements in Force as
ofApril 2002 303
Box 15.7 The Americas:Trade Diversion—Displacement from Markets 311
Box 15.8 Chile:Strategy for Growth—Access or Diversion? 312
vii
list of Tables
Table 1.1 Rural-Urban Poverty Gap 4
Table 1.2 Agricultural Protection in Developing Countries,1984–87 and 1994–98 11
Table 1.3 Applied TariffRates in Developing and Industrial Countries,1994–98 (Percent) 12
Table 1.4 World Trade Simulation Model Product Categories 14
Table 1.5 Frequency ofNTBs in Developing and Industrial Countries,1994–98 (Percent) 15
Table 1.6 Export Growth Rates (Constant 1995 US$) 16
Table 1.7 Shares ofDeveloping and Industrialized Countries in World Exports (Percent) 16
Table 1.8 Gains from Removing All Trade Barriers in Agriculture and Food Globally,
Post-Uruguay Round,2005 (in 1997 US$ Billions) 17
Table 3.1 Percentage ofTotal Export Volume Receiving Export Subsidies 44
Table 3.2 Total Export Subsidy Commitments 44
Table 3.3 Percentage Use ofValue Commitments by Country 46
Table 3.4 Percentage Allocation ofTotal Value Commitments by Commodity 47
Table 3.5 Percentage Use ofthe Total Value Commitments Allocated
to Each Commodity Group 48
Table 3.6 Percentage Use ofthe Total Volume Commitments Allocated
to Each Commodity Group 49
Table 3.7 Countries Using over 90 Percent ofValue Commitments 50
Table 3.8 Countries Using over 90 Percent ofVolume Commitments 51
Table 3.9 Value Front-Loading 52
Table 3.10 Volume Front-Loading 52
Table 3.11 Export Subsidy Equivalents (ESEs) (Percent) 54
Table 4.1 Empirical Estimates ofTransfers Due to Policies in World Agriculture,
US$ Millions (1999–2001 average) 72
Table 4.2 Empirical Estimates ofTransfers Due to Policies by Commodity
in World Agriculture,US$ Millions (1999–2001 average) 73
Table 4.3 Examples ofTariffPeaks and Dispersion in Agriculture 75
Table 4.4 TariffEscalation (Weighted Average MFN Applied Tariffs in Percentage)
in the Quad Markets (U.S., EU, Japan,and Canada) 77
Table 4.5 Special Safeguards Tabled in the URAA 78
Table 4.6 Analyzing TariffEquivalents Using the Swiss Formula (maximum tariffof25%) 84
Table 4.7 World Production and Value ofProduction and Tariff-Quota-Related Protection
for Grains and Oilseeds in the Six Regions ofthe PEM Model 88
Table 4.8 Import Quotas in PEM 88
Table 4.9 Tariffs Applicable to TariffQuota Commodities 89
Table 4.10 TariffRates (US$/mt) 90
Table 4.11 Impact ofTariffQuota Border Protection (US$/mt) 91
Table 5.1 TariffQuotas by Product Category 97
Table 5.2 Number ofTariffQuotas by Member Country 98
Table 5.3 TariffQuotas by Principal Administration Method,1995–2001 98
Table 5.4 TariffQuotas:Simple Average Fill Rates,1995–2001 107
Table 5.5 Distribution ofFill Rates,1995–2000 108
viii