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Two of the most significant success stories under the auspices of the GATT have been the significant reductions in tariffs and the establishment of lower, non-discriminatory tariffs as a principal objective of multilateral trade negotiations. The Uruguay Round marked the eighth time that GATT Contracting Parties have negotiated reductions of trade barriers in a multilateral framework. The World Trade Organisation’s Doha Development Agenda (DDA) negotiations are striving towards further reductions in tariff barriers.
Multilateral negotiations over several decades succeeded in reducing average Most-Favoured-Nation tariffs on industrial goods from 40% at the end of World War II to 4% at the end of the Uruguay Round. Among major trading nations, the process has advanced reciprocally. However, some developing economies have not yet succeeded in integrating fully into the globalised world economy, facing serious market access problems abroad and imposing harmful import barriers domestically.
An OECD assessment of the post-Uruguay Round tariff structure points out two key observations:
First, the tariff reductions have not been even for all products and sectors. Second, tariff escalation continues to affect some sectors. Clearly, tariffs still matter as an instrument of trade policy and remain an important object of negotiation under the DDA.
Recent OECD research in the area of tariffs concentrates on quantification and assessment of potential effects of further tariff liberalisation under possible DDA tariff reduction scenarios. It includes identification of the sources for welfare gains, the distribution of such gains, and their sensitivity to variation in the formulas for tariff reduction.
This research points to the potential welfare gains from further liberalisation, including significant gains for developing countries. A closely related body of OECD research addresses adjustment issues related to trade liberalisation:
The Doha Development Agenda: Tariffs and Trade
The Doha Development Agenda: Welfare Gains from Further Multilateral Trade Liberalisation with Respect to Tariffs
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