Liberalizing
international agricultural trade has consistently been a difficult political
proposition. After the establishment of the General Agreement on Tariffs and
Trade (GATT) in 1948, it took nearly five decades for governments to
collectively embark on agricultural reform, which began in 1995 within a
multilateral setting following the successful conclusion of the Uruguay Round
(UR) of negotiations. With respect to improving agricultural market access and
tariff liberalization, two significant achievements of the UR – anchored in the
WTO Agreement on Agriculture (AoA) – were the elimination of non-tariff border
measures facilitated through the modality of tariffication, and the
comprehensive binding of customs duties on all agricultural products in
Members’ Schedules of Concessions. However, the immediate market access gains
from the UR were relatively modest. To enable access to each other’s markets –
particularly for sensitive sectors like grains, meat, dairy, and sugar, which
had often been protected by non-tariff measures (NTMs) and were therefore
subject to tariffication – participating Members established ‘minimum access
opportunities’ equivalent to 5% of domestic consumption in importing countries,
based on the 1986–88 reference period. In cases where countries already offered
greater access than this threshold, they were required to maintain existing
levels. To implement these minimum (or current) access commitments, Members in
practice relied systematically on the instrument of tariff rate quotas (TRQs).
More than one thousand TRQs were established in Members’ agricultural schedules
under the UR, and they continue to play a key role in facilitating market
access for highly sensitive products. TRQs allow exporters to access markets at
lower tariffs – albeit up to an agreed quantity – thus offering political
reassurance to importers against potential import surges.
Interestingly, several
regional trade agreements (RTAs) (such as free trade agreements or customs
unions) also rely on TRQs to provide market access for sensitive agricultural
products at reduced rates, rather than committing to full tariff elimination,
as a way to address political sensitivities surrounding agricultural
liberalization. This paper examines the important continuing role of TRQs in
enabling agricultural tariff liberalization within the multilateral trading system,
while also highlighting several practical concerns raised by exporting
countries regarding the administration of TRQs by importing countries. The
article also alludes to possible remedial mechanisms within the multilateral
trading system to address these concerns. The reduction in tariffs over the
years – and the resulting non-application of a majority of TRQs in several
Members’ schedules of concessions, due to the loss of the tariff advantage they
originally afforded – suggests a possible path forward: the elimination of dual
tariffs under TRQs in favour of a single tariff.