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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