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U.S. exports face high tariffs in some key markets - Global Food Trade - Brief Article
John WainioFrom 1996 to 2000, U.S. food and agricultural exports averaged about $60.6 billion per year. The existence of import tariffs in foreign markets was one of several factors affecting the size of this trade. Tariffs, which are taxes levied by a government on imported goods, drive a wedge between a country's domestic prices and those prevailing in international trade. By altering the relative prices of imported and domestically produced goods, tariffs decrease the volume of imports, as domestic production tends to increase and consumption decreases as a result of higher domestic prices.
Countries impose tariffs for a variety of reasons, the most common being to protect domestic producers from foreign competition. Tariffs are also used as a relatively easy way to generate revenue, particularly by developing countries. Regardless of their purpose, tariffs are the main trade-distorting policy instrument used by governments. In fact, high tariff protection for agricultural products is the major distorting feature of international trade today.
Tariffs imposed on U.S. food and agricultural exports in foreign markets have a dampening effect on the volume and value of this trade. Measuring the trade-restricting effects of tariffs is extremely complicated, however, as it is a function of numerous factors, including the manner in which producers and consumers respond to changes in relative prices. This article focuses on identifying major markets in which U.S. agricultural exports face high tariffs and attempts to compute the average tariff faced by U.S. agricultural exports in these markets. The effects of U.S. tariffs on other countries' exports are not addressed here.
Food Exports Overtake Bulk Commodity Exports
After achieving a record level of over $67 billion in 1996, U.S. agricultural exports steadily decreased over the next 3 years to $54 billion in 1999. The slowdown in the world economy, particularly in Asia, factored heavily in the decline. Lower prices for agricultural goods and a strong U.S. dollar also contributed to the contraction in the value of U.S. agricultural exports. In 2000, however, exports began to recover and increased to almost $58 billion.
The most striking characteristic of U.S. agricultural trade is the rapid growth in exports of high-value processed foods and beverages. Since 1997, this category has been the largest component of U.S. agricultural exports (fig. 1). In 2000, exports of processed products were valued at $22.5 billion, accounting for 39 percent of total agricultural and food exports, compared with 33 percent in 1996. (Trade data in this article come from the U.S. Department of Commerce (see box). Other agricultural export totals may differ depending on which commodities and foods are included.) Bulk commodities accounted for 32 percent of trade in 2000, followed by semiprocessed products at 19 percent and fresh horticultural products at 10 percent. While the drop in bulk commodity exports is largely due to decreased global demand and, correspondingly, decreased global prices, another important factor is that these commodities are increasingly being exported in a more highly processed form.
From 1998 to 2000, soybeans were the top U.S. export earner at almost $6 billion per year (table 1). Other billion-dollar products included traditional bulk commodities, such as corn, wheat, cotton, and tobacco, as well as semi-processed goods, such as soymeal and hides and skins. Billion-dollar high-value categories include frozen beef, frozen poultry, fresh or chilled beef, tobacco products, miscellaneous food preparations, and pet foods. Almonds, the highest earning commodity in the fresh horticultural products category, averaged over $700 million in export revenue during the 5-year period.
Wine was the fastest growing export category among the top 50 and grew by almost 15 percent per year. Wine was one of few categories that increased in export value each year. Fresh pork, frozen beef, cocoa products, candy, and frozen potatoes also registered impressive export growth. Beer, wheat, corn, other distilled spirits (liqueurs, cordials, etc.), and animal fats suffered large average yearly decreases in export value.
Twenty countries accounted for 85 percent of total U.S. exports during the 1996-2000 period. Japan was the top export destination, with average annual imports of almost $12 billion (table 2). Nine other destinations--the European Union (EU), Canada, Mexico, Korea, Taiwan, Hong Kong, China, Russia, and Egypl:--all averaged over $1 billion in sales per year. Of the top 10 destinations, only 2 showed positive sales growth during the period--Canada, with an annual growth rate of almost 5 percent, and Mexico, which grew at nearly 6 percent per year. Exports to the Dominican Republic, Turkey, and Saudi Arabia also grew during this period. The EU was the only top 10 destination in which sales dropped each year. U.S. agricultural exports to the EU decreased from almost $11 billion in 1996 to $7 billion in 2000, an average annual decline of almost 11 percent.
Among the top 20 export destinations for U.S. agricultural exports, only Mexico, Hong Kong, Indonesia, Colombia, the Dominican Republic, Thailand, and Venezuela imported each of the 215 agricultural categories at least once during the 5 years. Brazil imported the smallest assortment of agricultural goods, only 190 of the 215. Egypt imported 205 different agricultural goods from the United States, but 51 percent consisted of a single category, wheat, while another 25 percent consisted of corn. Other countries in which U.S. imports consisted primarily of two or three goods included Indonesia (56 percent in soybeans and raw cotton), Venezuela (55 percent in corn, wheat, and soymeal), Israel (53 percent in soybeans, wheat, and tobacco products), Colombia (52 percent in corn, wheat, and soymeal), and the Dominican Republic (50 percent in tobacco, corn, and soymeal). In general, developing countries displayed a high degree of concentration in their purchases of U.S. food and agricultural goods, with a large share o f total import value comprising relatively few bulk or semi-processed commodities. Industrial countries, however, tended to be more diversified in their imports and accounted for the overwhelming share of U.S. high-value product exports.
The most lucrative markets for U.S. food and agricultural exports during 1996-2000 were corn and tobacco products to Japan and soybean and tobacco products to the EU (table 3). In aggregate, these four markets earned an average of over $6 billion per year.
Tariffs Facing U.S. Agricultural Exports in Selected Markets
Though U.S. agricultural exports face tariffs in all countries, this examination of tariffs is limited to 12 of the top 20 destinations. As the tariff database (AMAD) covers only World Trade Organization (WTO) members, four non-WTO members--China, Taiwan, Russia, and Saudi Arabia--are excluded. (China will become a full member on December 11, 2001; Taiwan will become a full member on January 1, 2002.) Canada, Mexico, Israel, and Hong Kong impose tariffs on U.S. exports that are zero or nearly zero, so these countries are also excluded from the discussion.
U.S. exports to the 50 markets listed in table 4 ranged from $556 million to $8.7 billion during the 1996-2000 period. The market share column in the table shows the percent of total exports of a commodity that went to a particular country. For example, 31 percent of total U.S. corn exports during this period went to Japan. Japan accounted for over 50 percent of the total export value of eight of the commodities found in table 4. Exports of fresh or chilled pork and hay were the most dependent on a single market, relying on the Japanese consumer for 78 and 71 percent of all export sales, respectively Japan also purchased 56 percent of fresh or chilled beef and 54 percent of frozen beef exports, while the EU bought 59 percent of U.S. almond exports and 52 percent of U.S. wine exports.
Table 4 also displays the average (mean) tariff rate faced by U.S. exports in these markets. In some cases, the average is computed from only 1 rate, while in others it is computed from over 50 rates. For example, the 18.5 percent tariff on corn exported to Japan is the simple average of five tariff rates ranging in size from 0 to 68 percent. Different rates are levied on imports of hybrid seed, other seed, corn for feed, popcorn, and other corn for food. In Japan's case, all tariffs on corn imports are single-tier rates. Tariff-rate quotas (TRQ) are not applied to corn imports in Japan.
A TRQ is a two-tiered tariff under which a limited volume (the quota amount) of goods can be imported at a lower in-quota tariff rate with any additional imports subject to a higher over-quota tariff. TRQs were established under the 1995 Uruguay Round trade agreement for goods that had previously been subject to highly protectionist nontariff barriers, such as quotas or import licensing. TRQs are designed to provide a limited amount of market access for imports (the greater of 5 percent of domestic consumption or the level that existed before the Uruguay Round) at low or minimal tariff rates.
Tariff averages are calculated using only the single-tier rates and the in-quota rates of the TRQs. The over-quota tariffs are not included in the calculation as it is assumed that very little trade takes place at these higher rates. For example, Korea has a TRQ for feed corn with an in-quota rate of 1.8 percent, under which a significant quantity of imports enter. The high over-quota rate of 328 percent, however, inhibits trade in excess of the quota amount. Even without including the over-quota rates in the calculation, the averages for some products are very high.
Although most trade takes place at tariffs under 10 percent, high trade flows take place in some categories subject to high average tariffs. For example, imports of tobacco products by Turkey, corn by Colombia, pet food by the EU, and pork, beef, and edible offal by Japan are subject to average tariffs of over 50 percent and they are among the largest markets for U.S. exports. As shown in table 4, these commodity groupings are subject to a range of tariffs. Thus, high tariffs on some subcategories within a grouping may impede trade, but low tariffs on other subcategories result in significant trade.
Some countries apply tariffs at levels significantly below their bound most-favored-nation (MEN) rates. While bound tariffs are the maximum rates that a country can charge on imports from WTO member countries without incurring a penalty, the importing country may choose to apply a tariff below the bound rate. For example, a country may charge a tariff below the bound level on imports from trading partners that have been granted preferential rates or exemptions (such as under the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico), or a country may charge lower tariffs during times of domestic production shortfalls.
The agricultural tariffs of many developing countries were bound at high levels, often over 100 percent, as a matter of insurance. This practice allows these countries to apply tariff rates at levels significantly below the bound levels when global prices are high, while preserving the option to increase tariffs, up to the bound level, when prices are low. The tariff averages in table 4 are calculated using bound tariffs and may not reflect the actual rate being charged on imports, particularly in many developing countries.
Tariffs on perishable products may vary throughout the year, with high tariffs during domestic production seasons and low tariffs at other times. While a product's tariff average might appear prohibitively high, a significant amount of trade may occur during times of the year when the tariff is low.
The wide range of tariffs levied on individual commodities within the same category indicates the extent to which countries tailored their tariff schedules to provide protection for specific products. For example, tariffs on tobacco product imports by the EU range from 10 to 75 percent. The low-trade category "cigarettes containing cloves" is assessed the lowest rate of 10 percent, while the categories "other cigarettes" and "smoking tobacco" (primarily pipe tobacco) are levied rates of 58 and 75 percent, respectively. The lowest assessed category may not be produced in the EU, or is produced in small quantities, while imports of the two higher assessed categories are likely competing with domestic production.
How To Compare Tariffs Across Countries?
The furthest one can reduce a set of data, and hopefully still retain any useful information, is to summarize the data with a single measure. With tariff schedules, it is common to calculate an average tariff to reflect the overall restrictiveness of a country's trade policy. Tariff averages, however, should be interpreted with caution, as they can be biased upward by a few high tariffs. Also, different methods of calculating the average can yield significantly different results.
To compare the levels of tariff protection faced by U.S. agricultural exports in the markets of major trading partners, we calculated average tariff measures using three different methods. Table 5 displays averages calculated using single-tier and over-quota tariffs, as opposed to single-tier and in-quota tariffs, as used in table 4. The over-quota rate is used because, in most cases, it represents the marginal, binding constraint on additional trade. As such, this rate gives a more accurate account of the level of protection provided by the tariff schedule. The first tariff measure shown in table 5 is a simple, unweighted average of the tariffs levied by each country on the 215 agricultural categories exported by the United States. A simple average gives an equal weight to all goods, so a tariff on kumquats receives the same weight as a tariff on wheat, even though wheat may be traded in significantly greater quantities.
The second measure uses the country's actual agricultural imports from the United States as weights. Weighted averages are generally calculated to emphasize certain tariffs over others. In this case, the higher the value of U.S. exports to the country, the greater the weight given to the tariff. This method is equivalent to calculating the average duty paid on U.S. agricultural imports in each country. Multiplying these averages by the value of total U.S. exports to each country would give an approximation of the total duties that country collected on imports from the United States, assuming the items were assessed the bound MFN rates. Weighting based on import values frequently biases average tariff estimates downward, because items with the highest tariffs will receive virtually no weight as little or no imports are likely to enter under such tariffs.
The third measure uses total U.S. exports as weights, rather than just exports to the country in question. The advantage of this approach is that it provides equal weights in doing calculations for each country, thus providing a more consistent way to both measure and compare the relative levels of tariff protection at each border faced by the U.S. agricultural export sector. In this case, the trade-restricting effects of extremely high tariffs in each country are explicitly taken into account, as high tariffs will receive a weight based on the level of total U.S. exports, not exports to that country.
Tariff Averages Reveal Considerable Scope for Reductions
Based on the simple average, the most protected market found in table 5 appears to be Egypt, with an average tariff of well over 100 percent. However, when Egypt's tariffs are weighted by the value of product imported from the United States, its tariff average goes from highest to second lowest within the group. The reasons for this variation are straightforward and are probably linked more to religious or public health concerns than to protection of domestic production. Egypt has tariffs of over 1,000 percent on alcoholic beverages as well as high tariffs on tobacco and tobacco products, live pigs, pork, and pork products. On the other hand, Egypt has tariffs of only 5 percent on its largest imports from the United States, wheat and corn, which accounted for almost 77 percent of total U.S. agricultural exports to Egypt. The high tariffs bias the simple average upward while the high weights given to wheat and corn bias the import-weighted average downward. Under the third approach, the average tariff is highe r than the average based on actual imports but lower than the simple average. For the mix of products that the United States exported globally over the 1996-2000 period, the average tariff faced in the Egyptian market was 92 percent, among the highest found in major markets.
Most countries demonstrate the same pattern displayed by Egypt with regard to the difference between the first two tariff measures. The simple average is biased upward by the presence of a few extremely high tariffs, while the average weighted by actual imports is biased downward by the trade-chilling effects of these high tariffs. Some countries, however, do not adhere to the pattern.
In Canada and Mexico, tariffs levied on U.S. agricultural goods are, in most cases, considerably less than the bound MFN rates. For these countries, the averages instead demonstrate the level of tariff protection that U.S. exports would face if NAFTA did not exist and U.S. exports were levied the MFN rates. In Hong Kong and the Dominican Republic, the three tariff measures are all the same. Hong Kong allows all food and agricultural products to enter duty-free and the Dominican Republic levies a straight 40-percent tariff across-the-board for these products.
In Brazil, Colombia, Korea, Thailand, and Venezuela, the simple average tariff is also less than the average weighted by U.S. imports. These countries frequently apply tariff rates well below the bound MFN rates. In this case, one might expect the import-weighted tariffs to be below the simple tariffs. This example gives some indication of the trade-creating effect of lowering tariffs. Countries that apply tariffs that are lower than bound levels stimulate imports. This effect, in turn, could give the higher bound rates a larger weight in the second calculation than they would receive in the simple average approach.
When tariffs are weighted by total U.S. exports, one might expect the averages to be higher than when weighting by actual U.S. exports to each country, as the total U.S. exports approach would explicitly take the high tariffs into account. Again, the results are mixed. A comparison of the averages weighted by total U.S. exports and the simple averages is revealing. In this case, one would expect the weighted measures to be higher if the tariffs levied on products important to the U.S. agricultural export sector are higher than the average. With the exception of Egypt, Indonesia, and the Philippines, this is indeed the case.
For example, in Japan, the largest market for U.S. agricultural exports, the simple average tariff equals 47 percent, and the average weighted by U.S. exports equals 57 percent. Thus, the simple, unweighted average, which is generally considered to be biased upward, is actually less than the average calculated using U.S. export weights. For the mix of agricultural products the United States exports, the more important the export category, in terms of value, the greater the chance that the tariff it faces in the Japanese market will be higher than the average. Using total U.S. exports as a weighting scheme shows that many of the United States major trading partners appear to have bound their agricultural tariffs such that the rates on products important to the U.S. agricultural export sector are higher than the simple average tariff would indicate.
Countries have traditionally measured the benefits of negotiating tariff reductions by calculating the extent to which they increased access to partners' markets. Our results indicate that there appears to be considerable scope for negotiating tariff cuts in markets of interest to U.S. agriculture. In many of the largest markets, U.S. agricultural exports already face relatively low or moderate tariffs. The United States could increase its exports by negotiating further reductions in these tariffs.
In other important markets, such as the EU, Japan, and rapidly growing developing countries, however, U.S. exports face high bound tariffs. Exports occur only because TRQs provide some market access or because countries apply tariffs below bound rates. In many of these markets, especially where over-quota tariffs are bound at prohibitively high levels or the applied tariff is significantly below the bound rate, increased trade will probably result
only via deep cuts in bound rates. In lieu of this, increasing the quota or negotiating cuts from applied rates, as the United States has proposed, are alternative methods to expand trade in these markets.
Focusing on tariffs where large volumes of trade already take place discounts the amount of potential trade that could occur in markets where no trade currently takes place. It is difficult, however, to determine the level of trade that might result from reducing prohibitively high tariffs when no trade currently takes place. More work is needed in this area. As this analysis demonstrates, one indication of how much trade might be expected in those markets where no trade is currently taking place is suggested by the amount of trade taking place in markets where tariffs are already being applied at rates below the bound MFN rates.
Wainio is an agricultural economist and Gibson is a data coordinator with the Market and Trade Economics Division, Economic Research Service, USDA.
References
Gibson, Paul, John Wainio, Daniel Whitley, and Mary Bohman. Profiles of Tariffs in Global Agricultural Markets, Agricultural Economic Report No. 796. U.S. Department of Agriculture, Economic Research Service, January 2001.
Sandrey, Ron. The Relative Tariff Ratio Index, New Zealand Trade Consortium Working Paper No. 7. The New Zealand Trade Consortium with the New Zealand Institute of Economic Research, 2000.
[Figure 1 omitted]
Table 1
Wine Is Fastest Growing U.S. Agricultural Export But Soybeans Are Top
Earner
Product 1996 1998 2000 1996-00
Average
Million dollars
Soybeans 7,458 4,885 5,313 5,943
Corn 8,626 4,619 4,714 5,701
Tobacco products 5,268 4,842 4,035 4,609
Wheat 6,307 3,714 3,388 4,234
Cotton (not carded) 2,742 2,566 1,936 2,188
Food preparations: mixtures 1,724 1,814 1,966 1,873
Poultry (frozen) 2,092 1,647 1,521 1,696
Soybean meal 1,430 1,605 1,171 1,428
Tobacco (unmanufactured) 1,396 1,467 1,235 1,396
Beef (fresh or chilled) 1,273 1,300 1,665 1,393
Pet food 1,115 1,268 1,404 1,251
Hides and skins (bovine) 1,390 1,027 1,376 1,228
Beef (frozen) 1,108 958 1,498 1,178
Feed: waste and residues 1,120 802 759 883
Crude vegetable material 670 806 833 773
Almonds 897 715 631 719
Bakery products 659 701 733 702
Edible offal: (fresh or frozen) 721 597 694 650
Starches (nonedible) 449 494 723 626
Sorghum 758 550 627 620
Rice (milled) 735 612 512 617
Pork (fresh or chilled) 462 475 748 549
Animal fats 586 642 381 529
Soybean oil 323 904 250 501
Wine 309 516 538 457
Pork (frozen) 465 447 504 447
Hay 418 378 467 418
Fresh grapes 367 335 455 390
Fresh apples 409 350 388 388
Potatoes (preparations) 324 405 357 374
Rice (unmilled) 296 596 324 373
Crude animal material 378 359 402 366
Orange juice 340 363 354 360
Cocoa products 335 315 453 360
Live animals (breeding) 297 356 450 348
Potatoes (frozen) 285 346 376 337
Whiskey 297 311 367 329
Vegetables (preparations): other 308 337 320 326
Beans, peas, and lentils (dried) 311 386 286 324
Corn oil 272 401 238 307
Stone fruit (fresh) 278 261 351 306
Vegetables (fresh): other 258 290 338 293
Oranges 289 357 304 292
Distilled spirits (other) 402 235 237 288
Essential oils 267 287 301 288
Candy 246 275 326 285
Nonalcoholic beverages 232 289 288 279
Other nuts and fruit (dried and 266 279 295 278
fresh)
Poultry (fresh or chilled) 219 307 263 275
Beer 367 256 171 264
Subtotal 57,545 48,046 47,264 50,041
Share of U.S. total 85% 82% 81% 83%
Total U.S. agricultural exports 67,636 58,699 58,117 60,591
Product 1996-00
Market share Growth rate
Percent
Soybeans 9.8 -8.1
Corn 9.4 -14.0
Tobacco products 7.6 -6.4
Wheat 7.0 -14.4
Cotton (not carded) 3.6 -8.3
Food preparations: mixtures 3.1 3.3
Poultry (frozen) 2.8 -7.7
Soybean meal 2.4 -4.9
Tobacco (unmanufactured) 2.3 -3.0
Beef (fresh or chilled) 2.3 6.9
Pet food 2.1 5.9
Hides and skins (bovine) 2.0 -.3
Beef (frozen) 1.9 7.8
Feed: waste and residues 1.5 -9.3
Crude vegetable material 1.3 5.6
Almonds 1.2 -8.4
Bakery products 1.2 2.7
Edible offal: (fresh or frozen) 1.1 -.9
Starches (nonedible) 1.0 12.6
Sorghum 1.0 -4.6
Rice (milled) 1.0 -8.6
Pork (fresh or chilled) .9 12.8
Animal fats .9 -10.2
Soybean oil .8 -6.3
Wine .8 14.9
Pork (frozen) .7 2.1
Hay .7 2.8
Fresh grapes .6 5.5
Fresh apples 6 -1.3
Potatoes (preparations) 6 2.4
Rice (unmilled) .6 2.2
Crude animal material .6 1.5
Orange juice .6 1.0
Cocoa products 6 7.8
Live animals (breeding) 6 11.0
Potatoes (frozen) 6 7.2
Whiskey .5 5.4
Vegetables (preparations): other .5 1.0
Beans, peas, and lentils (dried) .5 -2.1
Corn oil .5 -3.3
Stone fruit (fresh) .5 6.0
Vegetables (fresh): other .5 6.9
Oranges .5 1.3
Distilled spirits (other) .5 -12.4
Essential oils .5 3.0
Candy .5 7.3
Nonalcoholic beverages .5 5.6
Other nuts and fruit (dried and .5 2.7
fresh)
Poultry (fresh or chilled) .5 4.7
Beer .4 -17.3
Subtotal NA -4.8
Share of U.S. total NA -1.1
Total U.S. agricultural exports NA -3.7
Note: NA = not applicable.
Source: Compiled from official trade statistics of the U.S. Department
of Commerce, Bureau of the Census.
Table 2
Canada and Mexico Continue to Gain as U.S. Export Destinations
for Agricultural Products
Country 1996 1998 2000 1996-00
Average
Million dollars
Japan 13,370 10,984 11,785 11,871
European Union 10,892 9,360 6,964 9,000
Canada 7,135 8,150 8,630 7,988
Mexico 5,497 6,272 6,826 5,933
Korea 4,010 2,257 2,766 2,917
Taiwan 3,045 1,876 2,119 2,356
Hong Kong 1,635 1,588 1,390 1,548
China 2,094 1,354 1,779 1,543
Russia 1,746 1,015 865 1,129
Egypt 1,300 979 1,062 1,090
Phillippines 924 716 883 835
Turkey 712 796 805 756
Saudi Arabia 746 703 749 741
Indonesia 854 455 679 660
Israel 686 468 597 580
Colombia 635 595 420 531
Dominican Republic 420 507 526 513
Thailand 616 421 515 503
Venezuela 474 510 414 478
Brazil 633 483 262 432
Subtotal 57,425 49,488 50,036 51,403
Share of U.S. Total 85% 84% 86% 85%
Total U.S. agricultural exports 67,636 58,699 58,117 60,591
Country 1996-00
Market share Growth rate
Percent
Japan 19.6 -3.1
European Union 14.9 -10.6
Canada 13.2 4.9
Mexico 9.8 5.6
Korea 4.8 -8.9
Taiwan 3.9 -8.7
Hong Kong 2.6 -4.0
China 2.5 -4.0
Russia 1.9 -16.1
Egypt 1.8 -4.9
Phillippines 1.4 -1.1
Turkey 1.2 3.1
Saudi Arabia 1.2 .1
Indonesia 1.1 -5.6
Israel 1.0 -3.4
Colombia .9 -9.8
Dominican Republic .8 5.7
Thailand .8 -4.4
Venezuela .8 -3.3
Brazil .7 -19.8
Subtotal NA -3.4
Share of U.S. Total NA .3
Total U.S. agricultural exports NA -3.7
Note: NA = not applicable.
Source: Compiled from official trade statistics of the U.S. Department
of Commerce, Bureau of the Census.
Table 3
Billion-Dollar Export Markets Include Corn and Tobacco to Japan,
Soybeans and Tobacco to EU
Country Product 1996
Million
dollars
Japan Corn 2,462
Japan Tobacco products 1,559
European Union Soybeans 2,349
European Union Tobacco products 1,576
Japan Soybeans 1,145
Mexico Soybeans 859
Japan Beef (fresh or chilled) 810
European Union Tobacco (unmanufactured) 656
Japan Beef (frozen) 683
Mexico Corn 1,025
European Union Feed: waste and residues 802
Korea Corn 1,262
Taiwan Corn 962
Egypt Wheat 775
Japan Wheat 654
Russia Poultry (frozen) 858
Taiwan Soybeans 777
China Soybeans 414
Korea Hides and skins (bovine) 565
Japan Pork (fresh or chilled) 405
European Union Almonds 583
Mexico Cotton (not carded) 262
Canada Food preparations: mixtures 289
Mexico Sorghum 310
Canada Bakery products 321
Hong Kong Poultry (frozen) 383
Japan Edible offal: (fresh or frozen) 429
Canada Pet food 305
Korea Soybeans 439
Mexico Beef (fresh or chilled) 113
China Cotton (not carded) 730
Japan Hay 281
Korea Beef (frozen) 212
Egypt Corn 312
Philippines Wheat 329
Japan Pork (frozen) 320
Japan Pet food 203
European Union Wine 147
Canada Beef (fresh or chilled) 273
Korea Wheat 328
Mexico Wheat 326
Saudi Arabia Tobacco products 195
Japan Cotton (not carded) 323
European Union Pet food 240
European Union Corn 413
Japan Tobacco (unmanufactured) 231
Canada Vegetables (fresh): other 166
Canada Orange juice 183
Indonesia Soybeans 213
Japan Food preparations: mixtures 167
Subtotal 29,624
Share of U.S. total 44%
Total U.S.
agricultural exports 67,636
Total Average
Country 1998 2000 1996-00 1996-00
Million dollars
Japan 1,490 1,427 8,727 1,745
Japan 1,659 2,096 8,717 1,743
European Union 1,555 1,148 8,426 1,685
European Union 1,263 473 5,247 1,049
Japan 874 774 4,712 942
Mexico 759 721 3,911 782
Japan 695 869 3,873 775
European Union 689 550 3,236 647
Japan 592 648 3,162 632
Mexico 611 541 3,072 614
European Union 540 457 2,981 596
Korea 466 210 2,965 593
Taiwan 377 457 2,954 591
Egypt 523 496 2,797 559
Japan 472 422 2,590 518
Russia 502 347 2,560 512
Taiwan 276 385 2,479 496
China 274 1,008 2,454 491
Korea 291 504 2,236 447
Japan 354 559 2,136 427
European Union 437 320 2,127 425
Mexico 616 484 2,008 402
Canada 392 419 1,865 373
Mexico 355 483 1,788 358
Canada 355 399 1,777 355
Hong Kong 301 356 1,725 345
Japan 291 342 1,710 342
Canada 341 355 1,656 331
Korea 305 259 1,600 320
Mexico 330 494 1,571 314
China 126 59 1,519 304
Japan 288 318 1,481 296
Korea 134 507 1,437 287
Egypt 188 345 1,387 277
Philippines 223 246 1,344 269
Japan 226 234 1,255 251
Japan 236 319 1,246 249
European Union 264 293 1,183 237
Canada 220 227 1,176 235
Korea 216 181 1,162 232
Mexico 215 218 1,154 231
Saudi Arabia 198 268 1,099 220
Japan 254 139 1,063 213
European Union 233 155 1,046 209
European Union 160 69 1,034 207
Japan 211 195 1,014 203
Canada 196 238 991 198
Canada 200 195 975 195
Indonesia 139 164 972 194
Japan 209 167 958 192
Subtotal 22,122 22,539 120,556 24,111
Share of U.S. total 38% 39% 40% 40%
Total U.S.
agricultural exports 58,699 58,117 302,953 60,591
Source: Compiled from official trade statistics of the U.S. Department
of Commerce, Bureau of the Census.
Table 4
Considerable Scope Exists to Reduce Tariffs Even Where Significant Trade
is Already Occurring
Total exports
Country Product 1996-00
Million dollars
Japan Corn 8,727
Japan Tobacco products 8,717
European Union Soybeans 8,426
European Union Tobacco products 5,247
Japan Soybeans 4,712
Japan Beef (fresh or chilled) 3,873
European Union Tobacco (unmanufactured) 3,236
Japan Beef (frozen) 3,162
European Union Feed: waste and residues 2,981
Korea Corn 2,965
Egypt Wheat 2,797
Japan Wheat 2,590
Korea Hides and skins (bovine) 2,236
Japan Pork (fresh or chilled) 2,136
European Union Almonds 2,127
Japan Edible offal: (fresh or frozen) 1,710
Korea Soybeans 1,600
Japan Hay 1,481
Korea Beef (frozen) 1,437
Egypt Corn 1,387
Philippines Wheat 1,344
Japan Pork (frozen) 1,255
Japan Pet food 1,246
European Union Wine 1,183
Korea Wheat 1,162
Japan Cotton (not carded) 1,063
European Union Pet food 1,046
European Union Corn 1,034
Japan Tobacco (unmanufactured) 1,014
Indonesia Soybeans 972
Japan Food preparations: mixtures 958
European Union Wheat 922
Korea Cotton (not carded) 911
Indonesia Cotton (not carded) 888
European Union Food preparations: mixtures 885
Japan Sorghum 882
Japan Potatoes (frozen) 854
European Union Crude vegetable matter 800
European Union Soymeal 795
Colombia Corn 784
European Union Whiskey 745
Philippines Soymeal 712
European Union Live animals (breeding) 693
Japan Hides and skins (bovine) 625
Turkey Cotton (not carded) 623
Thailand Soybeans 615
European Union Essential oils 613
Japan Grapefruit 596
Turkey Tobacco products 580
European Union Starches (nonedible) 556
Market Tariff Tariff Type of tariff
Country share average range Single-tier In-quota
Percent Number
Japan 31 18.5 0-68 5 NA
Japan 38 9.1 0-30 8 NA
European Union 28 0.0 0.0 2 NA
European Union 23 37.6 10-75 8 NA
Japan 16 0.0 0.0 1 NA
Japan 56 50.0 50.0 3 NA
European Union 46 14.1 11-18 5 NA
Japan 54 50.0 50.0 3 NA
European Union 68 16.9 0-185 11 NA
Korea 10 1.7 0-3 NA 4
Egypt 13 5.0 5.0 2 NA
Japan 12 5.0 0-20 NA 4
Korea 36 5.0 5.0 27 NA
Japan 78 60.1 0-248 9 NA
European Union 59 1.0 0-2 2 2
Japan 53 58.9 0-523 21 NA
Korea 5 5.0 5.0 NA 1
Japan 71 0.0 0.0 5 NA
Korea 24 41.6 41.6 NA 3
Egypt 5 5.0 5.0 2 NA
Philippines 6 26.7 20-30 3 NA
Japan 56 60.4 0-227 9 NA
Japan 20 18.3 0-98 14 NA
European Union 52 5.7 0-40 28 NA
Korea 5 4.2 2-9 6 NA
Japan 10 0.0 0.0 2 NA
European Union 17 72.6 0-231 23 6
European Union 4 24.0 0-38 2 1
Japan 15 0.0 0.0 3 NA
Indonesia 3 27.0 27.0 5 NA
Japan 10 20.3 5-53 44 24
European Union 4 3.2 0-13 1 3
Korea 8 2.8 2-7 6 NA
Indonesia 8 33.5 27-40 2 NA
European Union 9 9.6 0-33 22 NA
Japan 28 1.0 0-3 3 NA
Japan 51 10.4 9-14 3 NA
European Union 21 1.5 0-16 54 NA
European Union 11 0.0 0.0 1 NA
Colombia 3 137.0 80-194 NA 4
European Union 45 0.2 0-0.3 4 NA
Philippines 10 5.0 5.0 1 NA
European Union 40 2.3 0-12 5 NA
Japan 10 0.0 0.0 5 NA
Turkey 6 5.5 5-6 2 NA
Thailand 2 20.0 20.0 NA 2
European Union 43 3.2 0-17 40 NA
Japan 53 10.0 10.0 2 NA
Turkey 3 145.1 130-167 6 NA
European Union 18 14.7 0-38 15 NA
Note: NA = not applicable. Does not include markets in non-WTO members
(China, Russia, Saudi Arabia, and Taiwan) and countries where the U.S.
faces agricultural tariffs that are already zero or near zero (Canada,
Mexico, Israel, and Hong Kong).
Sources: Compiled from official trade statistics of the U.S. Department
of Commerce, Bureau of the Census and tariff information in the
Agricultural Market Database (AMAD).
Table 5
Country Agricultural Tariff Averages Can Vary Significantly Depending on
Method of Calculation
Simple Weighted Weighted
unweighted by imports by total
Country tariff average from U.S. U.S. exports
Percent
Japan 47.2 44.3 56.5
European Union 25.0 16.2 29.6
Canada (1) 16.1 17.0 33.9
Mexico (1) 46.2 53.4 52.1
Korea 69.4 156.4 128.4
Hong Kong 0.0 0.0 0.0
Egypt 136.6 12.6 91.8
Philippines 36.2 25.7 32.5
Turkey 56.4 50.4 67.9
Indonesia 49.3 38.3 43.6
Israel 86.4 76.3 88.9
Colombia 94.8 132.8 107.6
Dominican Republic 40.0 40.0 40.0
Thailand 38.7 50.9 47.5
Venezuela 59.9 93.4 72.4
Brazil 36.5 38.6 40.3
Average
U.S. Imports
Country 1996-00
Million dollars
Japan 11,871
European Union 9,000
Canada (1) 7,988
Mexico (1) 5,933
Korea 2,917
Hong Kong 1,548
Egypt 1,090
Philippines 835
Turkey 756
Indonesia 660
Israel 580
Colombia 531
Dominican Republic 513
Thailand 503
Venezuela 478
Brazil 432
(1)Tariffs used in calculating these averages are those faced by
non-NAFTA countries.
Sources: Compiled from official statistics of the U.S. Department of
Commerce, Bureau of the Census and tariff information in the
Agricultural Market Access Database (AMAD).
RELATED ARTICLE: Data, Methodology, and Definitions
This analysis uses official trade statistics of the U.S. Department of Commerce, Bureau of the Census and tariff data from the Agricultural Market Access Database (AMAD). Commodity coverage was based on the definition of agriculture as specified in the WTO Agreement on Agriculture. The trade database contains trade flows between the United States and 113 countries. It is the same trade reported by the United States to the United Nations for inclusion in the International Bilateral Agricultural Trade (IBAT) database. It was aggregated to conform with the IBAT's 232 agricultural category definitions. These categories are largely composed of aggregations of commodities at the 6-digit Harmonized System (HS) level. The HS provides a nomenclature for classifying internationally traded goods. Up to the 6-digit level, tariff schedules across countries use identical categories for commodity aggregations, with the categories established regularly by the World Customs Organization. Beyond the 6-digit level, however, thi s correspondence may not exist. Because commodity definitions at an 8-digit or higher level of disaggregation may vary from country to country, specific comparisons across countries are increasingly difficult at progressively higher levels of detail.
The Organization for Economic Cooperation and Development (OECD) maintains the AMAD. This database contains detailed tariff and tariff-rate quota information at the tariff-line level for World Trade Organization (WTO) members. The WTO is the institutional and legal foundation of the multilateral trading system. It provides the principal contractual obligations determining how governments frame and implement domestic trade legislation and regulations. As of July 26, 2001, WTO membership totaled 142 countries or customs territories. The term "tariff-line" refers to the category to which the WTO member's legally established tariff applies. Tariff-lines are bound within the WTO at various levels of specificity. For instance, the tariff schedule for Turkey contains tariffs bound at the 4-, 6-, and 8-digit HS levels.
Tariffs rates used throughout this article are the final bound most-favored-nation (MFN) tariffs established by WTO members. Bound tariffs are the maximum MFN rate (nondiscriminatory tariffs extended among WTO members) that a country can charge on imports. However, countries may choose to apply a tariff below the bound rate, and often do, particularly for imports from trading partners that have been granted preferential rates or exemptions.
In order to match a country's tariffs to the IBAT trade figures, sometimes a number of 6-, 8-, or 10-digit tariffs had to be aggregated to the corresponding IBAT level. This was done through a simple, unweighted average. In cases where the tariff was not in ad valorem form, however, an ad valorem equivalent (AVE) had to first be calculated.
For more information on the tariffs found in the AMAD and the methodology used to calculate AVEs, see Gibson et al., Profiles of Tariffs in Global Agricultural Markets.
COPYRIGHT 2001 U.S. Department of Agriculture
COPYRIGHT 2004 Gale Group