Generated Summary
This paper explores changes in the treatment of agriculture within bilateral and regional preferential trade agreements (PTAs) over the last 60 years. The study examines the inclusion of 20 provision areas across 54 agreements, focusing on changes in market access, export competition, and domestic support. The methodology involves coding provisions based on binary questions and counts to generate quantitative metrics, analyzing tariff preferences across 96 agreements, and exploring preference margins for 291 agreements. The aim is to understand how these agreements treat agriculture over time, focusing on the expansion, maintenance, or limitation of trade agreement coverage in the sector. The research considers a range of provision areas and examines how various relevant provisions are included within each agreement, creating a picture of how countries have sought to expand, maintain, or limit the scope of trade agreements regarding agriculture. The research also acknowledges that enforcement of the provisions will depend on institutional settings and administrative procedures of the countries concerned.
Key Findings & Statistics
- Of the 54 agreements examined, all cover agriculture at least partially.
- Four agreements, all involving the European Free Trade Association (EFTA), place exclusions on certain agricultural commodities from the agreements as a whole.
- 54% of the sampled agreements exclude some agricultural commodities from at least some of the coded provisions.
- Only 30% of the agreements contain a specific chapter, title, or significant section on agriculture.
- 26% of the agreements contain provisions relating to special and differential treatment (SDT), with only one case (CARIFTA [1968]) making explicit reference to agriculture.
- Preference margin on agro-food products from identified bilateral and regional trade agreements almost doubled from 8.9% to 16.2% between 1988 and 2013.
- The share of covered agro-food trading lines has increased from around 19% in 1994 to 39% in 2015.
- The preference margin has been growing over time, increasing from an average of 1.3 percentage points for the period 1993-95 to 5.6 percentage points for 2014-17.
- For agro-food trade flows where there were no agreements, there was a small increase over the period, from 0.3 percentage points to 0.7 percentage points.
- The average preference margin on agro-food products for bilateral agreements was 3.1 percentage points, with that of regional trade agreements at 3.4 percentage points.
- For dairy and sugar, there has been a sharp increase in the number of HS6-digit bilateral tariff lines covered by preferences, whereas for cotton and rice, there has been virtually no change.
- 67% of the PTAs analyzed included SPS provisions.
- Agreements entering into force from 1995 onwards are reportedly significantly more likely to contain SPS provisions than those entering into force prior to this date.
- In the sample, most agreements use the most-restrictive accumulation rules.
- In the sample of agreements explored, 50% have provisions for amendments of minor errors within the RoO certification process.
- Half (50%) explicitly prohibit or phase out the use of export subsidies in general (Figure 14).
- 68% of agreements sampled prohibit or restrict export taxes or duties (Figure 15).
- The majority (74%) of agreements examined ban or limit the use of general export restrictions or prohibitions (Figure 16).
- A total of 61% of the sample include SPS provisions.
- The inclusion of SPS provisions is a more recent development compared with many of the other provision areas.
- The number of agreements that ban or limit export restrictions or prohibitions has increased over the years, albeit with a slight slow down, relative to the sample, in the 2000-10 period.
- 70% of agreements sampled include measures to counter the effects of subsidised imports.
- The number of agreements containing agricultural SSGs has decreased relative to the increase in agreements over time.
- Agreements with provisions relating to state trading enterprises (STEs) exist in less than half (46%) of the sampled agreements.
- 81% of agreements sampled feature anti-dumping provisions (Figure 21).
- Only two, both of which are European Union-based agreements (with Central American countries and Canada), and relatively recent (2013 and 2017 respectively), were found to refer explicitly to animal welfare.
- 61% of agreements sampled contain investment provisions.
- 17% of agreements examined exclude investment in aspects of the agricultural sector from certain commitments.
- 43% of agreements sampled include provisions on GIs, equating to 72% of sampled agreements with intellectual property provisions.
- 18% of agreements sampled include provisions that explicitly refer to co-operation on agricultural research, development and / or extension and training.
- While the inclusion of environmental provisions in PTAs has increased over time, only two (EEA [1994] and COMESA [1994]) refer to agriculture within their environment chapters.
- 70% of agreements sampled include measures to counter the effects of subsidised imports.
Other Important Findings
- The widening of the scope of the agreements has “carried” the agriculture sector along, with agreements applying broader provisions to relevant issues in the agriculture sector.
- Certain features of PTAs, such as heterogeneous rules of origin, may diminish the extent of liberalisation achieved.
- Preferential nature of these agreements means that there is scope for trade diversion, with access not necessarily provided to the most efficient global producers.
- Multilateral rules have facilitated the inclusion of similar provisions within agreements.
- Agreements are delivering reduced tariffs among members across the majority of agricultural commodities.
- Heterogeneity of rules of origin (RoO) between agreements is likely to be undermining the benefits of tariff reduction.
- Provisions related to Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) have become a standard feature of PTAs.
- The inclusion of trade remedies is increasing in line with trade liberalisation efforts.
- Recent features related to investment, competition, and intellectual property appear to extend to agriculture.
- Agriculture appears to be increasingly treated in a similar manner to other goods trade.
- The number of agreements featuring exclusions for agriculture has not kept pace with the increase in the number of sampled agreements.
- Preferential trade agreements appear to be strongly influenced by the multilateral framework.
- Agreements are delivering reduced tariffs among members across the majority of agricultural commodities.
- The study finds that agriculture appears to be increasingly treated in a similar manner to other goods trade.
- The study documents the inclusion of 20 provision areas across 54 agreements.
- Analysis of tariff preferences is provided for 96 agreements, complemented by an exploration of preference margins for 291 agreements.
- The research indicates that the preference margin on agro-food products from identified bilateral and regional trade agreements almost doubled from 8.9% to 16.2% between 1988 and 2013.
- The analysis of market access-related provisions extends beyond the 54 agreements for which individual provisions have been analysed.
- The study considers a range of provision areas and looks within each sampled agreement to see whether various relevant provisions are included.
- All 54 agreements examined cover agriculture at least partially.
- The inclusion of SPS provisions is a more recent development compared with many of the other provision areas.
- The main trade remedy which is specific to agriculture in the agreements examined is the special (or specific) agricultural safeguard.
Limitations Noted in the Document
- The graphs presented in this paper cannot depict the share of all agreements with particular characteristics, due to the uneven distribution across decades within the relatively small sample.
- The study does not explore the extent of enforcement of the given provisions.
- The study does not explore changes in the depth of provisions.
- The study also does not account for the inclusion of agricultural products from the entirety of the agreements.
- The potential for trade diversion is high.
- It remains difficult to determine the restrictiveness of RoO, with studies finding that a CTC rule is not more restrictive than a VC rule or a TR test.
- Given the nature of the agreements, the efforts remain partial and limited to members of the groups of agreements explored.
Conclusion
The research suggests that trade agreements have been a significant tool in delivering greater openness in agricultural markets. Despite gains in market access, the benefits of a more multilateral treatment of market access are still needed. Key findings highlight that agriculture is increasingly treated similarly to other goods, with a rise in the number of agreements without exclusions for agriculture. Preferential trade agreements are influenced by the multilateral framework, delivering reduced tariffs among members. Heterogeneous rules of origin may undermine benefits. SPS measures and TBTs are standard, trade remedies are increasing, and features on investment, competition, and intellectual property are extending to agriculture. There are limits to the capacity of PTAs to deliver greater disciplines in areas such as domestic support. Progress at the multilateral level needs to continue to derive the greatest benefits from global trade in agriculture. The range of issues explored within trade agreements will create an environment of greater international competition for agricultural sectors. This has the potential to push countries towards freer agricultural markets, as increased competition makes certain forms of protection less sustainable, thus reducing demand for trade protection. In doing so, it can help to capture the benefits that freer markets will deliver for consumers and producers alike. In order to derive the greatest benefits from global trade in agriculture, progress at the multilateral level needs to continue. The range of issues explored within trade agreements, and the inroads made, however, will create an environment of greater international competition for agricultural sectors within member countries. This process has the potential to nudge countries towards freer agricultural markets, as increased competition makes certain forms of protection less sustainable, thus reducing demand for trade protection.