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Agricultural tariff rate quotas implementation in the EU 1997-2002; Do developing countries enjoy quota rent?

Catherine Laroche Dupraz () and Alan Matthews ()

No 7910, 106th Seminar, October 25-27, 2007, Montpellier, France from European Association of Agricultural Economists

Abstract: 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.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 17
Date: 2007
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DOI: 10.22004/ag.econ.7910

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