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GTAP Resource #1850

"Sensitive and Special Products: Selection and Implications for Agricultural Trade Negotiations"
by Jean, Sebastien, David Laborde and Will Martin

The need to introduce flexibility in the way liberalization agreements are implemented is largely recognized, and is probably a sine qua non condition for an agreement to be reached on an substantial market access liberalization. But it is equally clear that flexibility can strongly undercut the extent of delivered liberalization, to the extent that actual protection is concentrated on a small number of products (Martin and Wang, 2004; Jean, Laborde, Martin, 2005). This works intends to shed light on the underlying trade off between flexibility and efficiency in delivering actual market access liberalization.
We review different formula approaches with embedded flexibility (Francois and Martin, 2003; Konandreas, 2004), in order to make clear what their application would entail. Since negotiations have so far most of all relied on the notion of specific and special products, we then discuss and assess various ways to define and implement such flexibility. We show how sensitive the results are with regards to "details" in the definition of these products. We also study how transparent, and how equitable different criteria are. In so doing, an important issue is to anticipate the way agreements would be enforced in practice (Martin and Wang, 2004; Jean, Laborde and Martin, 2005).
The methodology involves calculations at the HS6 level based on the MAcMap database (Bouët, Decreux, Jean and Laborde, 2004), and on CEPII's dataset on bound duties (Bchir, Jean and Laborde, 2005). Among issues of interest are the way AVEs are calculated, and the aggregation method followed.
Our anticipated finding is that the right way to look for a good balance between flexibility and efficiency is to adopt an economically-sound definition of sensitive products. This contrasts in particular with the notion of average cut, or of limits defined in terms of number of products.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2005 Conference Paper
Status: Published
By/In: Presented at the 8th Annual Conference on Global Economic Analysis, Lübeck, Germany
Date: 2005
Created: Jean, S. (6/13/2005)
Updated: Batta, G. (6/21/2005)
Visits: 4,021
No keywords have been specified.

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