Tuesday, August 09, 2005

Big EU tariff barriers a big problem in trade talks

With WTO Doha Round talks on agriculture stalled, and fears growing about the Hong Kong ministerial in December, it is increasingly becoming clear how big a problem is posed by the EU's high tariff barriers.

Market access is turning out to be the key problem in the farm trade talks and the US is blaming the EU and the protectionist G-10 group (led by Japan and Switzerland) for failing to make any concessions on the tariff reduction formula. The G-20 has a proposal on the table for a maximum 100% tariff for developed countries.

In fact more that seven per cent of the fixed rate farm tariffs used by the EU are set at an equivalent level of 100% or more. The most protected product in he whole CAP is revealed to be fresh or chilled 'skirt' of beef, used for meat processing, which has an ad valorem equivalent of some 407%.

Almost a quarter of the fixed rate tariffs (38 out of 158) used to protect the European dairy sector are set at an equivalent level of 100% or more. Buttermilk has an ad valorem equivalent of some 264%, while butter has AVEs of between 82% and 135%.

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