Agricultural Policies

Periodical

Market Access in Agriculture: Beyond the Blender

World Bank Trade Note No. 17, Washington DC (2004)

A fundamental requirement for success in any trade negotiation is finding a balance between flexibility and discipline. Because countries have very different interests, and all major decisions at the World Trade Organization must be made by consensus, any agreement must have the flexibility needed to address the specific needs of each member, while imposing enough discipline to yield the gains in export market opportunities that are the raison d’être of trade negotiations. Countries have been struggling to strike this balance under each of the three pillars of the agricultural agreement – market access (i.e, import barriers), domestic support, and export subsidies. Of these three, market access holds this largest potential gains for developing countries, but yet is the most difficult area to establish a balance. The mid-July draft framework for agricultural market access (WTO 2004) seeks to achieve this balance through a tiered approach with larger cuts in higher tariffs. This framework is much more general than the previous basis for negotiation, the “blended formula” approach in the Derbez Text (WTO 2003b)-- an approach with many hidden problems. To avoid introducing similar problems as the framework is converted into detailed modalities in the next stage of the negotiations, it is important to understand the problems with the blended formula.

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