The enlargement of market access in the WTO negotiations: What is the impact of tariff cutting formulas?

This article investigates the effect of different tariff cutting options discussed in the recent WTO-Round. Thereby the article focuses on the improved access to the EU market and whether industrialized countries, developing countries, least developed countries (LDCs) or the non-WTO member countries are able to take advantage of the enlarged EU market access. Using an extended GTAP model with bound and applied tariff rates, we conduct 10 experiments that differ in the magnitudes of tariff cuts, the tariff cutting formula, the implementation of a maximum tariff and in the numbers and width of tariff bands. The results reveal that the EU-27 experiences a relative increase of imports for beef, milk, sugar and cereals which is with varying degrees driven by the magnitude of tariff cuts, the kind of formula and the elimination of export subsidies. In contrast, numbers and width of bands as well as capping does not play a significant role. The LDCs are not obliged to reduce any of their tariffs in the current WTO-negotiation. Regarding these LDCs and the nonWTO member countries it therefore does not make much of a difference whether tariff cuts are high or implemented with different formulas, numbers and width of tariff bands. They only realize a minor trade gain. In contrast, other developing countries are able to disproportionately increase their beef, sugar and cereal exports to the EU, if higher tariff cuts are implemented. Other tariff cutting options do not lead to a significant higher access of developing countries to the EU market.