2. Assessing the agricultural negotiations with ATPSM September 2006 David Vanzetti Division on International Trade in Goods and Services, and Commodities UNCTAD, Geneva United Nations Conference on Trade and Development

3. ATPSM Agricultural Trade Policy Simulation Model Static Deterministic No stocks 35 commodities 160 countries plus EU25 plus RoW.

4. Outline Features Documentation Coverage Trade policies Outputs A likely scenario Results

5. ATPSM Documentation Downloadable from website unctad.org/tab Online help from interface Updates from website This ppt presentation available on request

6. Features Free Easy to use for and researchers, policymakers and negotiators Graphical user interface On-line help function and handbook available Report writer - Export to Excel

7. Limitations Bilateral trade issues (non-spatial) Tariff line level cuts TRQ definitions (=> overfilled) C++ version ≠ Excel version –EU25 –Production quotas –Land constraint –Decoupled domestic support

8. ATPSM Commodity Aggregation (1) Livestock Bovine meat Sheepmeat Pigmeat Poultry Milk, fresh Milk, conc. Butter Cheese Hides and skins Wheat Maize Sorghum Barley Rice Sugar raw Sugar refined Oilseeds, temperate Oilseeds, tropical Vegetable oils

9. ATPSM Commodity Aggregation (2) Pulses Roots, tubers Tomatoes Non-tropical fruits Citrus fruits Bananas Other tropical fruits Coffee green Coffee processed Cocoa beans Cocoa processed Tea Tobacco leaves Tobacco processed Rubber Cotton linters

10. Trade Policies Specified Global import quota Bound in-quota tariff rates Bound out-of-quota tariff rates Applied tariff rates Distribution of quota rents Export subsidies Domestic support Production quota Not suitable for RTAs Two tier tariff structure

11. ATPSM output Consumer surplus Producer surplus Tariff revenue Quota rents Welfare Commodity prices Production Consumption Exports Imports

12. Market Access: Current Tariffs Source: UNCTAD TRAINS, WTO Specific Problems: Tariff escalation Tariff peaks

13. European Union: bound and applied tariff rates Note: New AVEs (Paris), Five products with tariffs above 500% not plotted. Olive oil, refined Sugar, raw Tea

14. Developing countries: bound and applied tariff rates Number of tariff lines Tariffs in per cent Bound at ceiling level Lower applied rates

15. Market Access: Tiered Formula ThresholdsCuts Band % 1 0 – 3035 2 30 – 6045 3 60 – 9050 4  90 60 Developed Countries

16. Market Access: Tiered Formula ThresholdsCuts Band % 1 0 – 3025 2 30 – 8030 3 80 – 13035 4  130 40 Developing Countries

17. Ambitious scenario Banded tariff cuts plus caps 100, 150% Export subsidies -100% Domestic support -70/-60/-50%, -50% LDCs 0%. But No sensitive products No special products No TRQ expansion No safeguards

18. Base developing country exports Total = $117b

19. Base developing country imports Total = $102b

20. Base developing country tariff revenue by commodity Total = $14.5b

21. Base implied tariff by commodity Total = 14%

22. Results Prices Exports Imports Welfare

23. Change in world prices

24. Change in developing country exports by commodity

26. Change in developing country imports by commodity

28. Change in welfare by commodity Total = $15004m

29. Change in welfare Ranked Total = $15b 45 winners (inc EU25)

30. Implications World prices increase Increase in exports Increase in global welfare, $15b But 116 countries worse off (-ve terms of trade) –Export subsidy removal –bound > applied = few allocative gains –production quota rent

31. Improvements? Special/sensitive products + compensatory expansion of TRQs Tariff line level data Update data

32. The End