Evaluating existing policy flexibilities in WTO agricultural negotiations: different criteria for the selection of sensitive products

Within WTO agricultural negotiations, this paper deals with alternative criteria for the selection of sensitive products. Existing methodologies mostly rely on the analysis of tariffs and trade flows. On the contrary, assessments of the economic impacts on specific groups of stakeholders, namely the domestic agricultural sector, are missing or conducted at a high level of product aggregation. We hence develop a methodology that considers the effects of the selection of sensitive products on domestic agricultural prices. Our model, TRIMAG (Tariff Reduction Impact Model for Agriculture), defined at the 8-digit level, optimizes the domestic agricultural value added subject to a maximum number of sensitive tariff lines. The existing methodologies are applied to the Swiss tariff schedule and results compared with those of TRIMAG. Findings confirm the importance of developing sound economic criteria for the exante impact assessment of policy flexibilities. Furthermore, TRIMAG can be considered as a tariff aggregation tool that can be linked to agricultural simulation models that operate at a higher level of aggregation.