Reforming Market Access in Agricultural Trade: Tariff Removal and the Trade Facilitation Agreement

Twenty-five years after World Trade Organization member countries agreed to agricultural policy reforms embodied in the Uruguay Round Agreement on Agriculture of 1994 (URAA), multilateral efforts to reduce barriers to agricultural trade have largely stalled. This report estimates the potential gains in global trade and welfare (societal well-being) from two trade reform scenarios: elimination of agricultural tariffs, and a reduction in agriculture trade costs through implementation of the Trade Facilitation Agreement (TFA). Simulations reveal that reducing trade costs through the TFA could increase trade value by 7.27 percent. Removing agricultural tariffs could lead to an even larger global increase in trade value of 11.09 percent. Both scenarios would lead to an increase in societal well-being of $42.9 billion and $56.3 billion annually (respectively). This would represent gains to the global agricultural sector of a little more than 2 percent for each scenario. Although these gains represent an increase in agricultural market access, other market access barriers remain (e.g., nontariff measures).