The Developmental Relevance of Tariff Rate Quotas as a Market Access Instrument: An Analysis of Swiss Agricultural Imports

At present there are 1425 tariff rate quotas (TRQs) notified by member countries to the World Trade Organization. TRQs were provided for in the Uruguay Round as a trade policy instrument to guarantee minimum market access for politically sensitive agricultural imports, and in some cases to continue managed trade regimes. This article evaluates the developmental relevance of TRQs and discusses how the various methods TRQ administration methods influence market access in Switzerland for agricultural products from developing countries. The findings show that existing TRQ management in Switzerland is complicated and lacks transparency. Further, the manner in which TRQs are administered results in high transaction costs, a situation that fails to liberate trade opportunities from rents and influences trade flows of the partner countries. Proposed reforms are establishment of a more efficient administrative mechanism, modalities to liberalize trade with TRQs through reduction of out-of-quota tariffs, and capacity building in developing countries; such reforms would maximize market access opportunities from a development perspective.