DEVELOPMENT-BRIEF Number 49 The World Bank March 1995 tries carried out tariffication. Coun- A step backward in tries subject to tariffication under the agreement were to set initial a g r I c ulI t u ralI t ra d e at t h e base tariffs-to be applied in the first year of the agreement's imple- mentation-so that the resulting Uruguay Round? protection would be equivalent to the nominal protection in the base The worldwide liberalization of agricultural trade period, 1986-88. The new bound intended by last year's Uruguay Round agreement tariffs, along with tariffs that had may not be as great as expected been bound in earlier rounds of ne- gotiations, would then be reduced A gricultural protection risks not being achieved in practice, over the following six years for in- could continue-and may at least not until further reductions dustrial countries and 10 years for even increase-under the are agreed to in future rounds of developing countries. Uruguay Round agreement. In- negotiations. The major exception But tariffication in the OECD deed, the pact could end up being a is in Japan and high-income Asia, countries resulted in little or no lib- step backward in agricultural trade. where protection for major com- eralization for major agricultural The extent of intended liberaliza- modities will be significantly commodities (see figure). In part, tion was eroded in the negotiations, reduced. this was because the base period according to a recent World Bank chosen for establishing tariff bind- paper.* Why the erosion? ings featured some of the highest The trade agreement was to The Uruguay agreement fell short border protection in recent decades. achieve more open and fair trading of the intended liberalization in Tariff equivalents based on this pe- in agricultural commodities by re- large part because of the way coun- riod would therefore result in ducing export subsidies, tariffs and nontariff barriers, and domestic supponart Thrier, agent didmresuti Not much liberalization in industrial countries for major supports. The agreement did result arclua omdte in significant reform of the rules for agricultural trade, with some of the Tariff equivalents, 1986-88; tariffs bound in Uruguay Round, 1995 and 2000 (percent) most important changes being 300 tariffication (the conversion of nontariff barriers to bound tariffs), 250 binding of all tariffs (commitments