Download Border protection down...merchandise trade up Average tariff level

Market Access : the Heart of the DDA
Kenneth HEYDON
OECD Trade Directorate
0
Border protection down...merchandise trade up
AVERAGE
TARIFF LEVEL
Average tariff
level (industrial
goods, left axis) and
WORLD
MERCHANDISE
TRADE
VOLUME,
trade volume index (1950 = 100,1950=100
right axis)
50%
1,700
1,600
45%
1,500
1,400
40%
1,200
1,100
30%
1,000
900
25%
800
700
20%
600
15%
500
400
10%
300
200
5%
100
1997
1995
1993
1987
Post-Tokyo
Round
1991
1989
1987
1985
1983
1981
1979
1972
Post-Kennedy
Round
1977
1975
1973
1971
1969
1962
Pre-Kennedy
Round
1967
1965
1963
1961
1959
1957
1955
1953
1947
GATT's
establishement
1951
1949
0
1947
0%
1945
Average tariff level
35%
Trade volume indices
1,300
1994
Post-Uruguay
Round
1
OECD Study
Welfare gains in developed and developing countries from tariff
reductions and trade facilitation
180.00
83.51
160.00
140.00
48.1%
US$ billion
120.00
100.00
55.22
45.1%
Developed
90.05
Developing
80.00
60.00
40.00
67.22
54.9%
51.9%
20.00
0.00
Liberalization only by developed countries
Full liberalization by all countries
2
OECD Study
Initial differences between bound and applied tariffs (by sector)
Average difference between bound and applied rates,
1998 (% points)
45
40
35
30
25
20
15
10
ry
hi
ne
rts
ac
m
le
s
hi
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ve
he
m
C
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an
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ro
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al
P
ic
an
m
O
th
er
pa
uc
ur
in
uf
ac
t
P
d
W
oo
ts
g
ct
s
ro
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lo
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i
C
til
es
Te
x
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ss
ro
P
an
d
gr
A
ed
lR
at
ur
a
N
ng
re
ic
u
ur
es
o
gr
ic
A
ar
y
rim
P
ltu
ce
s
ul
tu
re
5
0
3
OECD study
Sectoral origins of welfare gains going to developing countries from full
tariff liberalisation
Other Machinery, 2.76
Primary Agriculture, 7.19
Motor Vehicles and Parts,
27.31
Processed Agriculture, 19.80
Wood Products, 0.46
Chemical Products, 3.91
Other Manufacturing, 13.81
Natural Resources, 2.13
Textiles & Clothing, 22.62
4
Which farms benefit from support?
share of 25% largest farms in …
100
Percent
80
60
40
Total
Support
20
S
U
EU
K
or
ea
C
an
ad
a
Ja
pa
n
Sw
itz
er
la
nd
0
5
Services make up a major and growing portion of the
world economy


In 2000, the estimated
total value of world
services was some US$
1.4 trillion.
In 2000, services made a
major contribution to the
GDP of both developed
and developing
countries:
– services to GDP
ratio in DCs ranged
from 39% in Nigeria
to 89% in Hong
Kong, China
– average services to
GDP ratio in the 49
LDCs was 10% with
peaks of 50%
Services, value added (2000)
% GDP
70
69.51
66.34
62.03
60
52.71
43.7
50
40
30
20
10
0
OECD
countries
Upper
Low er
Low
middle
middle
income
income
income countries
countries countries
World
Source: World Development Indicators
6
Gains from trade liberalisation
Studies
World gains from services liberalisation
US$ 90 billion
short run impact of full liberalisation of
services trade and FDI in a multiregion,
multisector general equilibrium model of
trade and investment under conditions
of imperfect competition, increasing
returns to scale, and product
differentiation (assumption of perf. int.l
capital mobility and fix. world capital
stock)
US$ 703 billion
long run impact of full liberalisation of
services trade and FDI in a multiregion,
multisector general equilibrium model of
trade and investment under conditions
of imperfect competition, increasing
returns to scale, and product
differentiation (assumption of less than
perfect capital mobility and increasing
world capital stock)
Brown and Stern
(2001)
Note: Estimates vary on the basis of the size of initial barriers, theoretical frameworks, modeling techniques and datasets used
7
Scenario results on income effects
Taking into account country, sector and trader diversity the
larger gains from trade facilitation should accrue to
developing countries
% of GDP
1.0%
0.5%
0.0%
OECD
Former
Soviet
Union
Middle East
& North
Africa
Latin
America &
Caribbean
Non-OECD
Asia-Pacific
Subsaharan
Africa
Rest of
world
8
Backing up Trade Policy Reform

Regulatory Reform

Institutions for Conflict Resolution
– property rights
– anti trust
– social insurance

Sound Macro-economic Management

Labour Market Flexibility

Technical Assistance & Capacity Building
9