Front Matter Page

Policy Development and Review Department

Contents

• Summary

• I. Introduction

• II. Methodology

  • 1. Exports

    • a. MFN tariff cuts

    • b. Tariff preference erosion

    • c. Textiles and clothing

  • 2. Imports

    • a. Tariff cuts

    • b. Food price effects

    • 3. Balance of payments

• III. Case Study I: Egypt

  • 1. Exports

    • a. Tariff cuts where Egypt is an MFN exporter

    • b. Tariff cuts where Egypt is a preferential exporter

    • c. Liberalization of quantitative restrictions on Egyptian exports

    • d. Total effect on exports

  • 2. Imports

    • a. Bindings

    • b. Tariffs: levels and reduction

    • c. Quantitative restrictions on imports

    • d. Impact on imports

    • e. Revenue effects

    • f. Effect of the Uruguay Round on Egypt’s food imports

  • 3. Balance of payments effects

  • 4. Other commitments under the Round

    • a. Subsidies and trade-related investment measures

    • b. Services

    • c. Intellectual property

• IV. Case Study II: Morocco

  • 1. Exports

    • a. Preference erosion

    • b. MFA reform

  • 2. Imports

    • a. Morocco’s commitments

    • b. Food imports

  • 3. Balance of payments

• V. Conclusions

• Tables

  • 1. Egypt: Impact of EU’s Tariff Cuts on Egypt’s Non-oil Exports to EU

  • 2. Egypt: Impact of U.S. Tariff Cuts on Egypt’s Non-oil Exports to the United States

  • 3. Egypt: Impact of Japan’s Tariff Cuts on Egypt’s Non-oil Exports to Japan

  • 4. Egypt: Indicators of Import Liberalization under the Uruguay Round

  • 5. Egypt: Impact of Import Liberalization under the Uruguay Round

  • 6. Egypt: Impact of Uruguay Round on Food Imports

  • 7. Egypt: Summary Impact of Uruguay Round in 2005

  • 8. Effects of Preference Erosion on the European Union’s Imports from Morocco

  • 9. EU Imports of Clothing by Leading Partners and SITC Categories, 1992

  • 10. Assumed Effects of MFA Quota Expansion on EU Imports of Clothing

  • 11. Effects of MFA Quota Expansion on EU Clothing Imports in Leading Industries

  • 12. Morocco: Impact of the Uruguay Round on Food Imports

  • 13. Morocco: Summary Impact of the Uruguay Round on the Trade Balance in 2005

• References

Summary

The conclusion of the Uruguay Round of multilateral trade negotiations represents an important achievement for international trading relations and medium-term growth prospects for the world economy. Nevertheless, some developing countries have raised concerns about possible adverse effects of the Round relating to the erosion of preferences for some suppliers and to higher food-import prices.

The paper sets out a methodology for quantifying the effects on developing countries of the various commitments under the Round on the liberalization of trade in goods. This methodology is applied to Egypt and Morocco. The case studies illustrate the range of effects engendered by the Round on imports and exports. The paper also identifies the limitations of the methodology.

The analysis reveals that Egypt and Morocco did not undertake significant commitments to liberalize their own trade regimes (although Egypt will eliminate its quantitative restrictions on textiles and clothing), but locked in previous trade liberalization and rendered their regimes more transparent. On the export side, the most significant impact on the two countries will be the elimination of the restrictive regime in textiles and clothing embodied in the Multifiber Arrangement. During the ten year phase-out period of this Arrangement, the effect is expected to be positive on Egypt as its export quotas grow, but negative on Morocco, which may suffer a loss in market share to currently constrained competitors. Thereafter, the export prospects of the two countries will depend critically on their ability to compete with suppliers in the Middle East, Eastern Europe, and Asia. Both the gains from most-favored-nation tariff cuts on Egypt’s exports and the losses stemming from the erosion of preference margins on export products that benefit from preferences are estimated to be small. In the case of Morocco, a predominant share of whose exports receive preferences in the European Union market, there will be some loss in exports from the most-favored-nation tariff cuts, although these will be small. Increased food costs from higher food prices are also likely to be insignificant. The overall balance of payments impact on the two countries, though negative, is not likely to be significant.

Nonetheless, the impact of the Round needs to be closely monitored as its provisions are implemented. Policy efforts should be directed at increasing productivity and fostering a favorable investment climate to ensure that benefits of the Round are maximized.