Towards free trade for agricultural goods - The allocation of tariff rate quotas using an average tariff procedure

The GATT agreement of 1994 on agriculture requires the tariffication of non tariff import barriers. it is allowed to import an unrestricted quantity if the resulting high tariff rates are paid. In addition, the countries defin e tariff rate quotas which guarantee imports at a reduced rate. The result: is a two-stage tariff rate system. The quotas are allocated administrative ly or auctioned off. The effective burden of the imports lies above the con tracted tariff-burden: Importers get rents or auction prices are paid to th e state. With the here suggested average tariff procedure the total burden is consistent with the WTO-agreement. Additionally, the allocation method l eads to lower marginal tariffs improving the consumers lot. The procedure r educes the financial interest of the state in the two-stage tariff rates. T he achievement of these goals is a challenge for the agriculture contract t o be negotiated starting in 2000.