Agricultural tariff rate quotas implementation in the EU 1997-2002; Do developing countries enjoy quota rent?
Tariff rate quotas (TRQs) have been introduced and legitimised as a market access instrument in the Uruguay Round Agreement on Agriculture (URAA). TRQs combine both restriction of imports, and safeguard of current or preferential agricultural trade flows. By restricting the market access through high level tariff beyond the quota, one can imagine that exporters enjoying low level tariff would take share of quota rent. Do developing exporting countries benefit from EU TRQs? Do they enjoy quota rents or guaranteed market access? What should be their interest to defend about TRQs at WTO agricultural negotiations? This article aims to present an analysis of the 87 EU's agricultural TRQs implementation from 1997 to 2002, in order to bring to the fore the effects of such an import instrument for exporting countries in competition on the import market. Some theoretical elements of the economy of TRQs are first presented in order to introduce the empirical work. The database built is then used to interpret EU agricultural TRQs implementation during the period 1997-2002, and the global results in terms of potential total rent that one can theoretically expect from TRQs is detailed by products grouping and export country grouping. A first examination of the database shows that while preference margin is potentially high for TRQs as a whole, potential rent is not so high. Moreover, this potential rent seems to be concentrated on only bananas and sugar, because TRQs are actually binding for those two commodities. A focus on those products indicates that only few exporting countries are susceptible to enjoy this potential rent: Latin American for bananas and ACP for sugar. However that does not signify that TRQs may be eliminated without big losses for exporters: they actually procure guaranteed EU's market shares protected from foreign competition.
Utilising agricultural tariff rate quotas as a development instrument
Tariff rate quotas (TRQs) were introduced as a new market access instrument in the Uruguay Round Agreement on Agriculture. The purpose of this paper is to examine the case for using this instrument to target improved market access for developing country agricultural exports, using the EU as a case study. The paper first identifies how TRQs relate to the EU's hierarchy of agricultural trade preferences under various preferential access arrangements. It then examines the extent to which developing countries have been able to make use of existing TRQ access to the EU market. Developing countries wanting improved market access for their agricultural exports have the choice of negotiating lower MFN tariffs, entering free trade agreements or regional integration schemes, seeking improved preferential access under Generalised System of Preferences schemes, or pressing for the introduction of preferential TRQs under the GATT's special and differential treatment provisions. The final section of the paper discusses the merits and drawbacks of each of these strategies.
Tariff-rate quotas: failed market access instruments?
Tariff-rate quotas (TRQs) were one of the policy instruments enshrined in the Uruguay Round Agreement on Agriculture, intended to improve market access for politically sensitive commodities and sometimes to continue managed trade regimes. This paper examines country and commodity coverage, tariffs bound and applied, administrative methods adopted, quota fill rates and import trends under TRQs. Experience with implementation shows there are problems with underfill and limitations on imports as a result of administrative methods. TRQs have effectively sanctioned import quotas, accompanied by rents and the need to allocate quota rights. Both theory and practice lead to our recommendation for eventual elimination of this instrument through lowering most favoured nation tariffs. Copyright 2002, Oxford University Press.