Korea's Tariff Rate Quota System: Impact of the Doha Development Agenda Proposals

Abstract

The analysis in this paper shows that quota administration methods have a significant impact on fill rates for Korea's TRQs. The proposed introduction of an under-fill mechanism in current Doha Round WTO negotiations, with a benchmark fill rate of 65 percent is likely to have important implications for Korea. According to our analysis, roughly 30 percent of current TRQ products would need to have increased imports. Static analysis using 47 tariff-quota equivalency test sheds light on whether it would be in Korea's interest to use the sensitive products' provisions in the draft agreement on agriculture to limit reductions in out-of-quota tariffs. Our analysis suggests that if Korea wishes to pursue the objective of minimizing import competition, it will need to give careful consideration to the choice of sensitive products. It may be preferable to implement the proposed reduction in tariffs in full for some products, rather than adopting smaller tariff reductions and increasing TRQs, particularly given the greater scrutiny that is proposed for fill rates under the proposed Doha Round agriculture agreement.