Agricultural tariffs in international trade

 Agricultural tariffs in international trade

Agricultural tariffs remain relatively high. Protection of 

processed products seems to be above average in most countries

while semi-processed products, on average, have the lowest tariffs.

The least developed countries (LDCs) protect their agriculture

sector at levels below the world average, while protection of

agriculture among members of the G-10 is above average, although

the wealthier countries also provide preferential rates for selected

partners. When these rates are taken into account, the average

tariff for OECD countries is comparable to that of developing

countries.

Many LDCs have a comparative advantage in agriculture,

suggesting that further trade liberalisation should help boost

growth. However, their advantage in the past has been mostly in

the production of bulk products, which is the slowest expanding

agricultural segment. Many high-income and upper-middleincome

countries with a comparative advantage in agriculture

have a comparative advantage in the production of semi-processed

and processed products. These countries should be able to

obtain a sizeable share of further gains from trade liberalisation,

assuming protection for all products is reduced proportionately.

As in any policy discussion, however, the “devil is in the details”.

LDCs produce the cheapest sugar, cotton, bananas, rice and other

products that are highly protected in some high-income countries.

More importantly, comparative advantages are continuously but

slowly shifting. A case in point is the shift in cut flower production

from countries like Israel, which is short of water, to African

countries like Kenya.