by Sushil Mohan, Sangeeta Khorana, Homagni Choudhury
Institute of Economic Affairs
November 15, 2012
Non-tariff barriers can be very high on both processed and unprocessed agricultural products. Currently, developing countries have a low share of exports of final processed products which normally have a higher value added than primary agricultural products. This situation is frequently blamed on developed countries applying trade barriers and escalating tariffs on processed commodities. However, there is little truth in this allegation, at least in relation to the important commodities of coffee, tea and cocoa, although tariffs barriers do exist in relation to other commodities such as cotton, rice and so on. The experience of trade reform suggests that the benefits from the removal of non-tariff barriers (which, it should be noted, are often homegrown in the developing countries themselves) will mainly flow to developing countries. Non-tariff barriers must therefore be a clear priority in future trade policy and in domestic policy-making in poor countries.