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Assessing the agricultural negotiations with ATPSM
September 2006
David Vanzetti
Division on International Trade in Goods and Services, and Commodities
UNCTAD, Geneva
United Nations Conference on Trade and DevelopmentUnited Nations Conference on Trade and Development
ATPSM
• Agricultural Trade Policy Simulation Model
• Static
• Deterministic
• No stocks
• 35 commodities
• 160 countries plus EU25 plus RoW.
Outline
• Features
• Documentation
• Coverage
• Trade policies
• Outputs
• A likely scenario
• Results
ATPSM Documentation
• Downloadable from website unctad.org/tab• Online help from interface• Updates from website• This ppt presentation available on request
Features
• Free• Easy to use for and researchers, policymakers and
negotiators • Graphical user interface• On-line help function and
handbook available• Report writer - Export to Excel
Limitations
• Bilateral trade issues (non-spatial)• Tariff line level cuts• TRQ definitions (=> overfilled)• C++ version ≠ Excel version
– EU25
– Production quotas
– Land constraint
– Decoupled domestic support
ATPSM Commodity Aggregation (1)
• Livestock• Bovine meat• Sheepmeat• Pigmeat• Poultry• Milk, fresh• Milk, conc. • Butter • Cheese• Hides and skins• Wheat
• Maize • Sorghum • Barley• Rice• Sugar raw• Sugar refined• Oilseeds, temperate• Oilseeds, tropical
• Vegetable oils
ATPSM Commodity Aggregation (2)
• Pulses
• Roots, tubers
• Tomatoes
• Non-tropical fruits
• Citrus fruits
• Bananas
• Other tropical fruits
• Coffee green
• Coffee processed
• Cocoa beans
• Cocoa processed
• Tea
• Tobacco leaves
• Tobacco processed
• Rubber
• Cotton linters
Trade Policies Specified
• Global import quota• Bound in-quota tariff rates• Bound out-of-quota tariff rates• Applied tariff rates• Distribution of quota rents• Export subsidies• Domestic support• Production quota• Not suitable for RTAs
Two tier tariff structure
ATPSM output
• Consumer surplus
• Producer surplus
• Tariff revenue
• Quota rents
• Welfare
• Commodity prices
• Production
• Consumption
• Exports
• Imports
Market Access: Current Tariffs
Bound Applied
High-income countries 51 48Middle-income countries 60 25Low-income countries 78 39
High-income countries 4 3Low & Middle-income countries 20 13
Agriculture
Non-AgricultureSource: UNCTAD TRAINS, WTO
Specific Problems:• Tariff escalation• Tariff peaks
European Union: bound and applied tariff rates
Note: New AVEs (Paris), Five products with tariffs above 500% not plotted.
0
50
100
150
200
250
300
350
400
450
1 159 317 475 633 791 949 1107 1265 1423 1581 1739 1897 2055
Olive oil, refinedSugar, raw
Tea
Developing countries: bound and applied tariff rates
Kenya bound and applied tariffs
0
20
40
60
80
100
120
0 200 400 600 800
bound
applied
Number of tariff lines
Tar
iffs
in p
er c
ent
Bound at ceiling level
Lower applied rates
Market Access: Tiered Formula
Thresholds Cuts
Band % %
1 0 – 30 35
2 30 – 60 45
3 60 – 90 50
4 90 60
Developed Countries
Market Access: Tiered Formula
Thresholds Cuts
Band % %
1 0 – 30 25
2 30 – 80 30
3 80 – 130 35
4 130 40
Developing Countries
Ambitious scenario
• Banded tariff cuts plus caps 100, 150%• Export subsidies -100%• Domestic support -70/-60/-50%, -50%• LDCs 0%.
But• No sensitive products• No special products• No TRQ expansion• No safeguards
Base developing country exports
0100020003000400050006000
700080009000
$m
Total = $117b
Base developing country imports
0100020003000400050006000700080009000
10000
$m
Total = $102b
Base developing country tariff revenueby commodity
0
500
1000
1500
2000
2500
$m
Total = $14.5b
Base implied tariff by commodity
0
20
40
60
80
100
120
%
Total = 14%
Results
• Prices• Exports• Imports• Welfare
Change in world prices
-2
0
2
4
6
8
10
12
14
%
Change in developing country exportsby commodity
-50
0
50
100
150
200
250
%
Change in developing country exportsby commodity
-500
0
500
1000
1500
2000
2500
3000
3500
$m
Change in developing country importsby commodity
-15
-10
-5
0
5
10
15
%
Change in developing country importsby commodity
-400-300-200-100
0100200300400500600
$m
Change in welfareby commodity
-500
0
500
1000
1500
2000
2500
3000
3500
$m
Total = $15004m
Change in welfare Ranked
-1000
0
1000
2000
3000
4000
5000
6000
7000
$m
Total = $15b
45 winners (inc EU25)
Implications
• World prices increase• Increase in exports• Increase in global welfare, $15b• But 116 countries worse off (-ve terms of
trade)– Export subsidy removal– bound > applied = few allocative gains– production quota rent
Improvements?
• Special/sensitive products + compensatory expansion of TRQs
• Tariff line level data• Update data
The End