EU agricultural tariff rate quotas:do they improve market access for Argentine Agricultural Products? A case study of maize and beef TRQs.

Abstract

The Uruguay Round Agreement on Agriculture (URAA) was set to be a step forward a fair agricultural market system as all border measures were converted into tariffs. In the face of resulted high bound tariffs, a compromise was reached by the introduction of tariff-rate quotas (TRQs) for guaranteeing minimum and current access to markets. TRQs are not only the combination of two tariffs and a quota but include an administration method that aims at rationing quota rights. Concerns about market access appear obvious since TRQs have resulted in few import opportunities. Allocation methods bring about extra costs as also do other enforced measures applied at the border. Both could be considered non-tariff costs and have the potentiality to bias trade. The EU is one of Argentina’s major destinations of agricultural products and EU TRQs are a means of market access to EU high protected markets. The analysis assesses the implications that non-tariff costs have for Argentine agricultural sector when utilising EU TRQs. Using beef and maize EU TRQs as case studies, this work evaluates how EU TRQs have improved Argentina’s market access to its agricultural market. It is concluded that EU TRQs usage does involve non-tariff costs for agri-food actors exporting from Argentina. These non-tariff costs have not, so far, hindered trade although they reduced the rent accrued by TRQ utilization when this exists. Being acquainted with the negotiating capital involved it is suggested that Argentina should have the reduction of MFN tariffs as principal objective in future multilateral negotiations. Key words: Market access, Argentina, European Union, Tariff Rate Quotas, Administration methods, non-tariff costs.