Discriminatory MFN tariffs: Specific tariffs in agriculture

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Sohini Chowdhury, on the job market this year from Purdue University, on the “The Discriminatory Nature of Specific Tariffs“:

This paper evaluates the distortions from specific tariffs levied on agricultural imports by rich countries. Through their non-MFN ad valorem equivalents (AVEs), specific tariffs discriminate against exports from poor countries because of the lower price of their exports. So the MFN specific tariffs levied by rich WTO member countries essentially translate into higher tariff barriers for the exporters of low price goods, suggesting that the benefits of preferential tariffs that poor countries enjoy might be offset by the specific tariffs they face. Our results show that specific tariffs levied by rich countries on their agricultural imports wash away 80% of the welfare benefits and 73% of the market access benefits enjoyed by poor countries from preferential tariffs. A policy implication of this paper is that the WTO should intensify efforts to eliminate specific tariffs.

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