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Abstract
It is necessary for multilateral trade negotiations to include exceptions to accommodate politically
sensitive sectors. However, given the highly concentrated distribution of agricultural
protection, too many exceptions put at risk the objectives of World Trade Organization. This
paper assesses the delicate balance required, based on the case of agricultural trade protection
in Europe and Japan, two countries where tariff dismantling in the agricultural sector
is a particularly sensitive issue. Since agricultural border protection is heterogeneous, we
avoid aggregation bias by extending a multi-country computable general equilibrium model
to the product level. This allows us to combine the assets from general equilibrium and
partial equilibrium modeling, and to take explicit account of interdependencies and trade
policies. The results suggest that consideration of sensitive products strongly limits the potential
gains from a possible agriculture agreement at Doha. Moreover, there is no aggregate
trade-off between decreasing tariffs and increasing/opening quotas. To achieve “substantial”
market access improvements in the agricultural sector, the objective should be most favored
nation tariff reduction.