Market Access Advances and Retreats: The Uruguay Round and Beyond

Abstract

Uruguay Round negotiations on market access were a success. Tariff cuts covered a larger share of world trade than those of the Kennedy or Tokyo Rounds and will save importers some $50 billion a year. In the Uruguay Round negotiations, trade distorting agricultural policies were taken up substantively for the first time in any round of multilateral trade negotiations. Voluntary export restraints outside the Multifibre Arrangement (MFA) were in fact eliminated. Developing countries became equal partners with developed countries. Their tariff cuts covered as large a share of imports as those of the developed countries and were deeper. Because developing country tariffs were higher to start with, their cuts will save importers more (per dollar of imports covered) than will cuts by developed countries. Tariff bindings for most developing countries, although often above applied rates, were extended to 90 percent or more of imports. Few countries agreed to give foreigners unlimited market access in services, or full national treatment in more than a few service activities. But developed countries agreed to some liberalization of cross-border provision for 70 percent of service activities (compared with 25 percent in developing countries). Less positively, although trade restrictions on agricultural products were converted to tariffs, border protection was reduced less on agricultural than on industrial products, and there was little agreement on reducing trade-affecting subsidies. The textiles and clothing agreement binds developed countries to eliminate all MFA-sanctioned restrictions but allows them to largely put off doing so until 2005. Concessions to which developing countries agreed are due now. Reciprocal concessions of particular interest are either due in the future (elimination of the MFA) or yet to be negotiated (liberalization of agricultural trade). Also disquieting, since the Uruguay Round, developing countries have undertaken antidumping cases at a rate (per dollar of imports) three times higher than that for the United States - mostly against other developing countries. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to assess the amount of liberalization which resulted from the Uruguay Round. The research was supported by the Global and Regional Trust Fund component of the World Bank/Netherlands Partnership Program. Michael Finger may be contacted at jfinger@worldbank.org.