Question - Will Developed Countries Be Allowed To Shield Some Of Their Agricultural Products From Full Tariff Cuts?
Answer -
Members (both developed and developing) may designate an appropriate number of tariff lines to be treated as sensitive, on which they would undertake lower tariff cuts. Even for these products, however, there has to be “substantial improvement” in market access, and so the smaller cuts would have to be offset by tariff rate quotas, thus improving the possibilities of market access. According to the draft modalities of 6 December 2008, developed countries can designate 4% of tariff lines as sensitive products; for members with more than 30% of their tariff lines in the top tariff band (75+band), a higher entitlement of 6% is proposed.
Developing countries can designate one-third more (5.3% or 8%) of products, as Sensitive Products. Almost 35% of India's agriculture tariff lines are in the top band of 130+ and therefore, the sensitive product entitlement would be 8%. In other words, India would have the flexibility to take lower cuts than would otherwise be required under the tariff reduction formula on 8% lines, using one of the options for developing countries that do not require provision of access through tariff quotas.