rates often reflect autonomous choices (Matthews, 2003). In many countries, applied rates are
low as part of a strategy to keep food prices down for low-income consumers. In other cases,
applied rates are low or have been lowered as part of a regional integration strategy with
neighbouring countries.
However, flexibility on average does not rule out the possibility that, for particular
commodities, bound tariffs may constrain applied tariff levels. If so, this will apply a fortiori
if bound tariffs are further reduced in the Doha Round. It is therefore probable that a larger
number of countries would find that the tariff overhang will be reduced for a larger number of
products and even that they may be required to reduce applied rates below those currently in
force.
Sharma (2002) argues that the cases where countries have difficulties living within their
bound tariffs are often basic foods, where tariffs are often higher than the average rate and in
many instances are supplemented by additional measures such as surcharges and variants of
price band policies. The case study evidence from 23 developing countries summarised by
(2003) suggests that applied rates are often close to bound rates for a wider range of products,
including dairy products, poultrymeat and alcoholic beverages. This is an area where
quantitative evidence for disaggregated commodities is as yet limited.
Special safeguards
One reason why a margin between bound and applied tariffs may be important to developing
countries is that it gives them flexibility to adjust border protection to stabilise domestic
prices in response to low world prices or import surges. Case study evidence has been
presented of particular problems with specific commodities in particular countries. Oxfam
quotes a number of examples where it claims small farmers have lost their livelihoods as a
result of rapid liberalisation and the growth of imports (Oxfam International, 2002). Its
examples include cheap maize imports from the US into Mexico as a result of the North
American Free Trade Agreement, rapid growth of imports of subsidised rice from the US into
Haiti and of subsidised milk powder from the EU into Jamaica. Import surges do not have to
be caused by subsidised imports; another Oxfam example is that imports of cheaper Thai rice
into Senegal caused severe distress to that country’s domestic rice sector. FAO (2000) reports
that Jamaica has faced difficulties in coping with import surges of various agricultural goods,
including meat products and sugar.
There are general provisions to deal with import surges under the WTO safeguards
provisions. However, the existing safeguards provisions are difficult and time consuming to
implement. Between 1995-2001, only seven developing countries initiated or implemented
emergency safeguards for a total of 16 agricultural products (Sharma, 2002). This is a small
number relative to the concern expressed. This might be because of the availability of other
measures (particularly the ability to raise applied tariffs within the bound ceiling, although the
existence of import surges suggests that governments did not resort to this option), because
the import surges did not lead to negative effects (which is one of the conditions to trigger the
safeguard), or, most likely, because the complexity of the emergency safeguard process made
it too difficult for countries to use.
Article 5 of the AoA allows countries which tariffied their non-tariff barriers in the Uruguay
Round to make use of a Special Safeguard (SSG), provided that they reserved this right in
their schedules. Only 21 developing countries are eligible for the Special Safeguard (SSG)
provisions within the AoA, and then only on a limited range of nominated product lines. The
limited evidence suggests that the clause has been rarely invoked (Ruffer and Vergano, 2002).
The problems arising from an import surge can be serious for vulnerable agriculture.
Developing countries and poor farmers have a limited capacity to adjust to a sudden upsurge