Market access matters

The FT’s correspondent in Geneva—Guy de Jonquières—reports on the wide differences that remain between the WTO members on how to ‘subtantially improve’ access to highly protected markts for agriculture. bq. Under US and EU pressure, the G20 last week set out broad principles for this month’s talks, but offered no specific proposals for narrowing gaps between the WTO protagonists. Indeed some leading G20 members now say WTO members should shelve ambitions for big improvements in agricultural market access and settle for agreements to cut subsidies. (“FT”: To be fair to the G20, the EU is even more reluctant to offer big cuts in its own very high tariffs on agricultural produce. Yet the EU has still greater reason to do so: it’s been demonstrated many times that the biggest winners from the elimination of absurd levels of protection for products such as sugar, oilseeds, cheese, meat, rice and grains are the world’s richest and most protectionist countries.

two charts from Market Access Matters showing the relative impact of the liberalization of subsidies and tariffs

The impact of market these border barriers on the poorest countries is many times the impact of subsidies: World Bank estimates show that the ‘welfare gains’ from eliminating tariff barrriers could be ten times as much. Even poor countries that do not export agricultural products will benefit from the opening of access to markets such as the EU, Japan, Norway, Canada and the USA. Why? Because the effect of astronomically high tariffs in these countries is to depress world market prices and, evenutally, the prices received by farmers in every less protected market.

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