The Art of Exceptions: Sensitive Products in the Doha Negotiations

CHRISTOPHE GOUEL; MARIA PRISCILA RAMOS

Santiago

Conferencia; 12th Annual Conference on Global Economic Analysis; 2009

Exceptions are necessary to multilateral trade negotiations to accommodate for politically sensitive sectors. But, given the highly skewed distribution of protection, allowing for too many exceptions makes WTO commitments at risk of losing most ambitions. This paper assesses this delicate balance through the case of agricultural trade protection in Europe and the US. Since the agricultural border protection is complex, we choose to avoid the aggregation bias by extending a multi-country computable general equilibrium model to the product level. We explicitly model the interaction between bilateral and multilateral tariff-rate quotas (TRQs) at the 6-digit level. In this way, we combine assets from general equilibrium and partial equilibrium modeling, taking into account all their interdependencies and representing policies in an explicit way.