Laborde, DavidMartin, Willvan der Mensbrugghe, Dominique2012-03-192012-03-192011-06-01https://hdl.handle.net/10986/3440This paper uses detailed data on bound and applied tariffs to assess the consequences of the World Trade Organization s December 2008 Modalities for tariffs levied and faced by developing countries, and the welfare implications of these reforms. The authors find that the tiered formula for agriculture would halve tariffs in industrial countries and lower them more modestly in developing countries. In non-agriculture, the formulas would reduce the tariff peaks facing developing countries and cut average industrial country tariffs by more than a third. The authors use a political-economy framework to assess the implications of flexibilities for the size of the tariff cuts and find they are likely to substantially reduce the outcome. However, despite the flexibilities, there are likely to be worthwhile gains, with applied tariffs facing developing countries cut by about 20 percent in agriculture and 27 percent in non-agriculture, and sizeable cuts in tariffs facing industrial countries. The welfare impacts of reform are evaluated using a new approach to aggregation that improves on the traditional, flawed approach of weighted-average tariffs. This substantially increases the estimated benefits of an agreement along the lines of these modalities, with estimated global income gains of up to $160 billion per year from market access reform.CC BY 3.0 IGOAGRICULTURAL DOMESTIC SUPPORTAGRICULTURAL ECONOMICSAGRICULTURAL EXPORTERSAGRICULTURAL GOODSAGRICULTURAL MARKETAGRICULTURAL MARKET ACCESSAGRICULTURAL PRODUCTSAGRICULTURAL TARIFFAGRICULTURAL TARIFFSAGRICULTURAL TRADEAGRICULTUREAVERAGE TARIFFAVERAGE TARIFF LEVELSAVERAGE TARIFFSBANANASBANK POLICYBENEFITS OF TRADECOMMERCIAL POLICYCOMMODITIESCOTTONCUTTINGDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDOMESTIC CONSUMPTIONDOMESTIC PRODUCTIONECONOMIC POLICYECONOMIC WELFAREELASTICITY OF SUBSTITUTIONEQUILIBRIUMEX ANTE ASSESSMENTEXPENDITUREEXPENDITURESEXPORTEXPORT COMPETITIONEXPORTSFREE MARKET ACCESSFULL LIBERALIZATIONGLOBAL TRADEGOVERNMENT PREFERENCEGRACE PERIODHIGH TARIFFSIMPORT DUTIESIMPORT PRICESIMPORT QUANTITIESIMPORT VOLUMESIMPORTSINFORMATION ASYMMETRYINTERNATIONAL BANKINTERNATIONAL ECONOMICSINTERNATIONAL LAWMARKET ACCESSMARKET ACCESS OPPORTUNITIESMERCHANDISE TRADENON-TARIFF BARRIERSOPEN TRADEPOLITICAL ECONOMYPRELIMINARY ASSESSMENTPRICE OF IMPORTSPROCESS OF NEGOTIATIONSPROTECTION FOR SALEQUOTA RENTSRATE QUOTASREAL INCOMEREDUCTION IN TARIFFSREDUCTIONS IN TARIFFSSPECIAL PROVISIONSSPECIAL SAFEGUARDSUGARTARIFF BARRIERTARIFF BARRIERSTARIFF BINDINGSTARIFF ESCALATIONTARIFF LINESTARIFF RATETARIFF RATE QUOTASTARIFF RATESTARIFF REDUCTIONTARIFF REDUCTIONSTARIFF REFORMTARIFF REVENUESTARIFF STRUCTURETRADE DISTORTIONSTRADE FACILITATIONTRADE NEGOTIATIONSTRADE POLICYTRADE REFORMTRADE REFORMSTRADINGTRADING PARTNERSTRANSITION ECONOMIESTRUST FUNDUNIFORM TARIFFSVALUE OF TRADEVOLUMEWELFARE GAINSWELFARE IMPACTSWORLD PRICESWORLD TRADEWORLD TRADE ORGANIZATIONZERO TARIFFSWorld Bank10.1596/1813-9450-5679