Tariff Rate Quotas: Failed Market Access Instruments

Abstract

Tariff rate quotas were included as a policy instrument of alternative in the Uruguay Round GATT Agreement on Agriculture in order to improve market access for some politically sensitive agricultural imports and in some cases to continue managed trade regimes. Implementation since adoption of this agreement has raised problems with underfill of quotas (countries’ minimum access commitments not being met), costs and limitations on imports due to administrative methods chosen, and that tariffication in this instance brought sanctioned quotas and so rents and the need to allocate rights to import. Usage of TRQs since 1994, including country and commodity coverage, tariffs bound and applied, administrative methods adopted, quota fill rates, and subsequent import trends, are examined. Resulting practical and theoretical problems lead to our recommendation for eventual elimination of this instrument through lowering of MFN tariffs, since other proposed reforms continue quotas and the problems now contributing to underfill