WORLD TRADE
ORGANIZATIONG/AG/NG/W/37
28 September 2000
(00-3944)
Committee on Agriculture
Special SessionOriginal:  English
MARKET ACCESS
Submission by Cuba, Dominican Republic, El Salvador, Honduras, Kenya, India,
Nigeria, Pakistan, Sri Lanka, Uganda, Zimbabwe
The area that was supposed to benefit developing countries most as a result of the
implementation of the Agreement on Agriculture was greater market access and larger amounts of
exports to the developed countries, as a result of their being more competitive when subsidies in the
OECD countries are reduced and trade barriers are lowered.  Unfortunately, after five years ofimplementation, the expected market access opportunities have not materialised. The FAO has
reported that, 'On the whole, few studies reported improvements in agricultural exports in the post-UR
period – the typical finding was that there was little change in the volume exported or in
diversification of products and destinations'. 
1
In fact, the irony is that the opposite scenario seems to have taken place. There seems to have
been more exports from the developed countries in to the markets of developing countries. The FAO
reports that for developing countries, 'Food imports were reported to be rising rapidly in most case
studies. There was a remarkably similar experience with import surges in particular products in the
post-UR period. These were dairy products (mainl y imports of milk powder) and meat products
(mainly poultry)… On the whole, a common obser vation was the asymmetry in the experience
between the growth of food imports and the growth of agricultural exports. While trade liberalisation
had led to an almost instantaneous surge in food imports, these countries were not able to raise their
exports.'2
According to UNCTAD statistics, the share of developing countries in world agricultural
exports remains low: from 31.7 per cent in 1970-1972, it fell to 25.4 per cent in 1990-92 beforeincreasing to 30.7 per cent by 1996 – 1997.  This is a figure that is smaller than 25 years earlier. In
contrast, between 1980 and 1996, the annual  growth of exports by OECD countries of primary
agricultural commodities and processed agricultural products was respectively, 2.5 per cent and
6.5 per cent.
3
The stagnation and even deterioration in trade performance in agricultural products is cause
for concern especially for the low-income countries. The lower the income of a country, the higher the
percentage of agricultural exports, as a proportion to total merchandise exports, thus the greater the
importance of exports to a country. In 1996, for example, of 55 developing countries, half had a share
of agricultural products in total merchandise exports in excess of 30 per cent. A quarter had a similar
                                                     
1 FAO 1999 Symposium on Agriculture, Trade and Food Security: Issues and Options in the
Forthcoming WTO Negotiations from the Perspective of Developing Countries, Paper No 3: Synthesis ofCountry Case Studies, Geneva 23-24 September 1999.
2 Ibid.
3 UNCTAD1999  ‘The Word Commodity Economy: Recent Evolution, Financial Crises, and Changing
Market Structures', Trade and Development Board Commission on Trade in Goods and Services, and
Commodities, TD/B/COM.1/27, 16 July.G/AG/NG/W/37
Page 2
share in excess of 50 per cent.  Similarly, as a proportion of GDP, agriculture's value added only made
up 1.5 per cent in the high-income OECD countries between 1990 – 1996. In contrast, in upper-
middle-income countries, this figure was 8 per cent, and 34 per cent for low-income countries
(excluding China and India).
Why has Agricultural Liberalisation and AoA Implementation Not Led to Increased Market
Access and More Positive Overall Results for Developing Countries?
In the light of studies and experience, the following reasons can be offered:
Dirty tariffication and tariff peaks :
When converting non-tariff barriers to tariffs, many developed countries took on tariff levels
that were much higher than their non-tariff equivalents. The QUAD countries in particular have set
some very high tariffs, reaching 350% or more.  A recent OECD study on border protection showed
that actual border protection to agriculture was higher in 1996 compared to 1993 in 8 out of 10 OECD
countries (treating EC as one).4
The post-UR tariff profile of many developed countries is typically characterised by relatively
high rates on temperate-zone food products, and lower rates on tropical products. Tariff reductions
were also generally lower for temperate-zone products. Developing countries as a whole have a high
stake in the export of temperate-zone products as these are also the products where the market is stillexpanding. 
5
Tariff peaks in agriculture are most common in three product groups: major food staples; fruit
and vegetables; and the food industry (processed food products).6 Products with the highest
frequencies of tariff peaks and escalations are in the major agricultural staple foods – cereals, meat,sugar, milk, butter and cheese - as well as those of export interest to developing countries, such as
sugar, tobacco, cotton and fruits and vegetables.
7  Indeed, it is not uncommon that these high OECD
tariff peaks exceed 100 per cent. In contrast, an UNCTAD /WTO study found that agricultural tariffs
above 100 per cent were rare in developing countries.8
Tariff escalation:
Tariff escalation (the situation where tariffs rise as the processing chain advances) was
reduced slightly in the post-UR period. However, it still prevails. An FAO study indicates that the
post-Uruguay Round tariff wedges (ie the difference between the tariffs on processed products and a
primary input commodity) in developed countries remain at an average tariff escalation of 17 per
cent.9
As a trade barrier, tariff escalation is becoming more and more of an issue since trade is
rapidly shifting to processed products. Furthermore, this is also a major obstacle for developing
                                                     
4 OECD 1999 ‘Preliminary Report on Market Access Aspects of UR Implementation, Document
COM/AGR/APM/TD/WP(99)50, June 1999, OECD, Paris.
5 FAO 1999  ‘Issues at stake relating to agricultural development, trade and food security', FAO
Symposium on Agriculture, Trade and Food Security, Geneva 23-24 September 1999.
6 UNCTAD / WTO (TD/B/COM.1/14), 1997.
7 Ibid.
8 UNCTAD 1999 ‘Examining Trade in the Agricultural Sector, with a view to Expanding the
Agricultural Exports of the Developing Countries, and to Assisting Them in Better Understanding the Issues atStake in the Upcoming Agricultural Negotiations', TD/B/COM.1/EM.8/2, 23 February 1999.
9 ESCAP/ FAO 1997 ‘The Impact of the Uruguay Round on Tariff Escalation in Agricultural Products',
by J. Lindland.G/AG/NG/W/37
Page 3
countries interested in escaping from the cycle of producing and exporting primary products and
earning less and less given the deteriorating terms of trade for primary commodities.
Tariff escalation prohibits diversification, which is very important for developing countries'
economies, particularly as most of the value added is created at the latter stages of production.Unfortunately, to date, due to the tariff structures in OECD countries, the value-added from
processing is largely captured by the developed countries.
The cocoa sector illustrates this situation. UNCTAD reports that the share of cocoa-producing
countries in world exports declines as the stage of processing increases. In 1997-98, for cocoa beans,
cocoa liquor, cocoa butter, cocoa powder and chocolate, the shares of developing countries were
respectively 90 per cent, 44 per cent, 38 per cent, 29 per cent and 4 per cent.
Unweighted tariff reduction:
This has also been the cause of the poor market access for developing countries. As part of
market access commitments, the developed countries were to reduce their unweighted average boundtariffs by 36 per cent. Each specific item was required a tariff reduction of only 15 per cent of the
claimed 1986-88 tariff equivalent. Moreover, the claimed tariff equivalent for the base was much
higher than the actual tariff equivalents of the time.
The result was that OECD governments reduced high tariffs on sensitive products (such as
products which they produced) by a smaller percentage, while reducing low tariffs by a larger
percentage.  The FAO found that few developing countries took advantage of this possibility of
reducing low tariffs by high amounts, in contrast to developed countries.
10
Complex, non-transparent tariffs:
Post-Uruguay Round tariffs in the agricultural sector has become more complex, especially in
the case of the developed countries, which is contrary to the UR's promise of a simple 'tariff-only'
regime. There has been an increase in the number of tariff lines to accommodate different tariffs
applicable to the same product, such as seasonal, in-quota and above-quota tariffs, and more frequent
use of non-ad valorem tariffs.11
Non-ad valorem tariffs disadvantage developing country exporters. They are less transparent,
and complicate the comparison of trade restrictiveness across countries and products, creating
uncertainties for exporters. In many cases, these tariffs also vary according to one or more technical
reasons, such as sugar content or alcohol content, making them even less transparent.12  Non-ad
valorem tariffs also weigh more heavily against lower-priced imports, and are therefore not in theinterest of developing countries.
The proportion of OECD tariff lines which are expressed in non-ad valorem terms is
significant, at 22 per cent for Canada and Japan, to 42 per cent the EU and the US, and around 90 per
cent for Switzerland. 
13
The use of variable tariffs by developed countries has also added to creating a non-transparent
tariff structure. OECD countries which bound tariffs at high levels (higher than their non-tariff
                                                     
10 FAO 1998 ‘The Implications of the Uruguay Round Agreement on Agriculture for Developing
Countries: A Training Manual, FAO, Rome.
11 UNCTAD 1999, TD/B/COM.1/EM.8/2, 23 February 1999, ibid.
12 FAO 1999  ‘Issues at stake relating to agricultural development, trade and food security', ibid.
13 ibid.G/AG/NG/W/37
Page 4
equivalent) have also applied variable tariffs below the binding.  Experts have concluded that while
tariffication had been expected to deliver on more st ability in the international market, the use of these
variable tariffs together with the very high bound tariff levels in developed countries will bring about
little, if any improvements in fluctuation.14
Tariff rate quota (TRQ):
The purpose behind introducing the system of tariff quotas under the AoA was to ensure that
the tariffication process would not reduce the current level of imports (current market access
opportunities), or prevent the achievement of agreed upon level of access (minimum access
opportunities) for products previously subject to non-tariff barriers.  Also the TRQs were not a
permanent solution and the ultimate objective remained full liberalization through gradual increases inTRQs.  However, the implementation of the tariff quota system was left up to importing countries,
with the result that there were little improvem ents in additional access under the quota schemes for
developing countries. The administration of tariff quotas  has played a big part in determining
whether or not new access for new suppliers resulted in the post UR period.
There have also been instances of manipulation of domestic consumption calculations  in
setting current and minimum access levels. The Modalities states that current access opportunities
'shall be no less than average annual import quantities for the years 1986-88'. However, there is no
mention of a specific base period for calculating domestic consumption for the minimum access
commitment, giving countries wide latitude.
15
The practice to establish TRQs to allot quotas based on highly aggregated commodity
groups , rather than on a product-by-product basis is also problematic. This is contrary to
specifications in the modalities, where it was said that minimum access opportunities were to be
established on a relatively disaggregated product level.
There have been numerous cases of quota under-fill , i.e., imports falling short of the volume
specified under tariff quota commitments. According to UNCTAD, in some cases, even when the
tariff quota volume was under-filled, imports were levied at the higher above-quota tariff rate.
UNCTAD also concludes that 'general lack of domestic demand as a reason for quota under-fill, is
seriously challenged when the domestic prices of those goods were clearly higher than world prices'.16
Other experts, Anderson, Erwidodo and Ingco have suggested that one possible reason for quota
under-fill is that quotas have been allocated deliberately to suppliers incapable of making full use of
them because of their international competitiveness.17
As shown in the table below, comparing the low in-quota and high out-of-quota tariffs for
selected products in OECD food-importing countries, there are huge benefits for exporting countriesto be allocated a quota license, amounting to more than $25 billion a year for the product markets
listed in the table. The extent of quota under-fill is also illustrated:
                                                     
14 Anderson, Erwidodo and Ingco 1999 ‘Integrating Agriculture into the WTO: The Next Phase', Paper
presented at the WTO/World Bank Conference on Developing Countries' in a Millennium Round, 20-21September 1999, Geneva.
15 Gorter 1999 ‘Market Access, Export Subsidies and Domestic Support Measures: Issues and
Suggestions for New Rules', Paper presented at the WTO / World Bank Conference on Agriculture and the NewTrade Agenda in the WTO 2000 Negotiations, 1-2 October 1999.
16 UNCTAD 1999 ‘Preparing for Future Multilateral Trade Negotiations: Issues and Research Needs
From A Development Perspective', Expert Group Meeting, 21-22 September 1998, Geneva.
17 Anderson, Erwidodo and Ingco, 1999 ‘Integrating Agriculture into the WTO: The Next Phase', The
WTO/World Bank Conference on Developing Countrie s' in a Millennium Round, 20-21 September 1999,
Geneva.G/AG/NG/W/37
Page 5
Table 1: In-quota and out-of-quota tariff rates and estimated maximum TRQ quota rents,
selected agricultural products and OECD countries, 1996
In-quota ad
valorem
tariff, %Out-of-quota
ad valorem
tariff, %Maximum
quota rents
($US billion)Quota
fill ratio,
%Quota as a
% of total
Imports
EU
Wheat
GrainsSugarDairy
Meats
Fruits and Vegetables0
35
0
24
19
1187
162147
91
128
510.0
0.42.41.1
2.3
0.021
74
100
99
100
782
268780
73
20
US
Sugar
DairyMeats2
11
5129
70261.0
0.60.097
776776
95
102
CANADA
Wheat
Dairy
Meats1
7
249
262
270.0
0.3
0.027
100
124218
75
72
JAPAN
Wheat
GrainsDairy0
0
29234
4913443.4
10.8
2.8109
109
9395
8491
KOREA
Rice
Grain
Oilseeds
DairyMeatsFruits and Vegetables5
3
8
21404789
326
545
106
42
3050.0
1.9
0.0
0.00.40.0100
148
157
85979953
61
62
106
7783
Ref: Elbehri, Ingco, Hertel and Pearson 1999 'Agr icultural Liberalisation in the New Millennium', paper
presented at the WTO/World Bank Conference on Agri culture and the New Trade Agenda from a Development
Perspective, 1-2 October 1999, Geneva.
In contrast, experts Abbott and Morse note that for developing countries, the majority of
applied tariffs are well below both MFN bindings and the low in-quota tariff rates set for TRQs.Hence, their actual tariff regimes are virtually never in violation of AoA commitments. Also, the
lower tariffs applied are MFN tariffs, not subject to administrative requirements of a quota system.
Imports of agricultural commodities for most of the countries using TRQs have either continued past
trends or expanded significantly beyond historical trends (in many cases).
18
For developing countries, under-fill is not an issue because substantial MFN tariff reductions
in developing countries have occurred. Cases in which imports are below commitments are simplyfollowing prior trends. The more likely reasons  for under-fill are low demand for these commodities,
the high transportation costs and the attractiveness of these markets. Furthermore, overfill is as
common as under-fill, reflecting the extent of liberalisation achieved. 
19
                                                     
18 Abbott and Morse 1999 ‘TRQ Implementation in Developing Countries', Paper prepared for the
World Bank/ WTO Conference on Agriculture and the New Trade Agenda in the WTO 2000 Negotiations,
October 1-2 1999, Geneva.
19 Ibid.G/AG/NG/W/37
Page 6
High subsidies in OECD Countries :
The high OECD subsidies are a major market access obstacle for developing countries in
several ways. For example, the subsidies result in huge OECD food surpluses which are oftenexported to developing countries, hence taking away third country markets from exporting developing
countries. In addition, subsidised OECD imports into developing countries destabilises and depresses
prices, destroys producers, and hence reduces developing countries' production capacity and export
potential.
In 1998, 24 OECD countries (excluding Czech Republic, Hungary, Korea, Mexico and
Poland), provided total agricultural support amounting to about $335 billion, with producer support at$251 billion. This makes total agricultural support three times the official development assistance
(ODA) flows and more than twice the foreign direct  investment (FDI) flows to developing countries
in that year. It also makes up almost 60 per cent of total world agricultural trade in 1997.
Support provided to some products which are also exported by developing countries is many
times the value of world trade in these items. In  1997, in the 24 OECD countries, producer support to
rice and meat was, respectively, 4.11 and 6.18 times  the value of world exports of these products.
20
According to UNCTAD, a clear example of how s ubsidies have destroyed developing countries'
domestic production and exports is that of Western Africa's tomato concentrate industry. Domestic
production in exporting West African countries has fallen dramatically, so that  from being exporters,some of these countries are now importers of the tomato concentrate.
21
SPS as a Trade Barrier:
FAO's investigation has revealed that more developing countries are experiencing trade
obstacles due to SPS measures.22  A major problem is that there is a lack of mutual recognition of
inspections and standards. Several major importing countries are asking for 'sameness' in the process,
rather than 'equivalence'.  Moreover, so far, only a handful of equivalence agreements have been
agreed upon, all amongst developed countries.
The variation and stringency of measures for imported food products can be gleaned from the
example of imported poultry meat. The different stan dards raises the issue of how arbitrary standard
setting can be. Of the 135 countries which are WTO members, 15 are currently allowed to export
fresh, chilled or frozen poultry meat to the EC, five may export to the US, one to Canada and none are
allowed to export to Australia.23  FAO rightly comments that indeed, 'Trade harassment' is 'considered
a common problem'.24
The huge obstacle for developing countries is the lack of financial or technical resources to
implement these stringent requirements or even to  take a significant role in the standard-setting
process. In terms of financial and technical assistance, FAO reports that there are few cases of
concrete assistance to developing countries from outside, as had been promised.
                                                     
20 ibid
21 ibid.
22 FAO 1999 ‘Synthesis of Country Case Studies, ibid.
23 Roberts, Orden and Josling 1999 ‘WTO Disciplines on Technical Barriers to Agricultural Trade:
Progress, Prospects and Implications for Developing Countries', WTO/World Bank Conference on Agriculture
and the New Trade Agenda in the WTO 2000 Negotiations, 1-2 October, Geneva.
24 FAO 1999 ‘Synthesis of Country Case Studies', ibid.G/AG/NG/W/37
Page 7
A number of developing countries had made specific proposals in relation to the concerns
relating to the SPS agreement in the pre-Seattle preparatory process. Redressal of these
implementation concerns is at present under consideration in the Special Session of the General
Council.
Recommendations
Tariff Reduction, Tariff Peaks and Escalation
1. The forthcoming negotiations must address the elimination of tariff peaks and escalations in
developed countries and an appropriate formula should be used to bring down these extremely high
tariffs by larger amounts to more reasonable levels. A harmonisation formula should also be designedto reduce tariff escalation, including the provision by developed countries, of the full liberalisation for
tropical products in processed forms.
2. Tariff reductions should also be weighted, rather than unweighted, in order to ensure that
sensitive products in developed countries are not given further protection.
3. Variable tariffs used by developed countries such as price band schemes ,as well as seasonal
tariffs, should be eliminated. Variable tariffs should only be allowed as a Special and Differential
Treatment for developing countries.
4. Tariff structures in developed countries should be made more transparent and less complex
and all tariffs should be converted to ad valorem tariffs.
Tariff Rate Quotas
6. The administration of tariff rate quotas by developed countries needs to be simplified and
made more transparent and equitable for all trading partners. TRQs should not act as quantitative
restrictions. To this end, there should be
i) Guidelines simplifying the administration of quotas so that there is complete
uniformity across countries and products and a complete transparency in their
administration.
ii) Common base period for calculating domestic consumption for the minimum access
commitment.
iii) Basing of quotas on specific products, rather than aggregated commodity groups.iv) A mandatory filling of quotas, in developed countries,  before imports take place at
the above-quota level.
v) Appropriate arrangements to ensure that new suppliers from developing countries
should have equal access to allotment within the TRQs.
vi) Regular enhancement of the TRQs administered by developed countries so as to
improve market access for developing countries.G/AG/NG/W/37
Page 8
Sanitary and Phytosanitary Measures:
7.   The difficulties encountered by developing countries in the context of the SPS Agreement,
particularly in relation to those provisions and procedures, which inhibit the ability of developing
countries to export agricultural products, must be suitably addressed.
Domestic Support:
8. Dumping must be prohibited and export subsidies of all forms (direct or indirect) by
developed countries must be eliminated. Domestic support provided by developed countries under
various categories should be substantially reduced, and then capped, so as to limit its trade distorting
impact.25
__________
                                                     
25 A number of developing countries have already submitted specific proposals in this regard, as
contained in G/AG/NG/W/13 and 14 and may individually or jointly with other Members add, elaborate or
further develop the proposals included in this paper in future.