| Following FAO's study in 1995 of the impact of the Uruguay Round (UR)
on agriculture, emphasis has shifted to other effects of the Round including
the impact on agricultural commodities which were not analysed in great
detail in the 1995 Study. Follow-up work by the Commodities and Trade
Division on the impact of the UR include issues of potential loss in the
value of preferences, price instability, market access and the export
prospects for non-traditional agricultural commodities, and the extent
of price transmission to the domestic markets of developing countries.
This study aims at broadening our knowledge about the impact of the UR
on tariff escalation in the agricultural sector. Tariff escalation (i.e.
higher tariffs on processed agricultural products than on their input
commodities) has been one of the obstacles for developing countries in
their efforts to establish processing industries for exports. The novelty
of the study, compared to other studies, is that changes in tariff escalation
are analysed on the basis of actual input/output processing relationships.
In addition, the study takes into account both specific and ad valorem
tariffs that may be applied on the input and output products.
The results of the study show that tariff escalation has been reduced
as a result of the UR, creating some opportunities for developing countries
to diversify their exports into higher value processed commodities. Another
interesting result of the study is the widespread existence of tariff
de-escalation (i.e. higher tariffs on the input than the on the output
commodity). The study concludes, however, that high levels of escalation
will still remain after the implementation of the UR tariff concessions. |
TABLE OF CONTENTS
Preface
Acknowledgements
Summary
Resumé en francais
Resumen en español
1. Introduction
2. The Problem of Diversifying Exports
3. Tariff Escalation Theory
3.1. Nominal Tariff Escalation
3.2. Effective Rates of Protection
3.2.1. Multiple Input and Single Output
3.2.2. Single Input and Multiple Output
3.3. Nominal versus Effective Protection
4. Availability and Quality of the Data
4.1. Commodity Coverage and Classification Systems
4.2. Processing Relationships
4.3. Tariffs (T and t)
4.4. Extraction Rates (Q and q)
4.5. Unit Prices (P and r)
4.6. The Matching of Data
5. The Findings
5.1. Tariff Wedges
5.1.1. The European Union
5.1.2. Japan
5.1.3. The United States of America
5.2. Effective Rates of Protection
6. Conclusions and Implications |
