Escalated export taxes and WTO rules as trade institutions: Lessons from Argentina’s biodiesel exports

Abstract

Abstract: For developing countries, the Uruguay Round had mixed results: some positive, some negative, and some negotiating areas only made marginal progress. In our view, adoption of the WTO rules for administering import barriers on contingent protection (mainly antidumping and countervailing measures) entailed a major positive institutional shift away from the high degree of trade policy arbitrariness that prevailed before. In contrast, strong pressures against liberalization of agricultural trade resulted in the failure of this Round to establish rules on primary agricultural export barriers. Included among these are escalated export taxes that entail input subsidies. This chapter reviews the experience of importing countries’ contingent protection measures that sought to compensate the input subsidies from escalated export taxes in biodiesel imports from Argentina. The end result of a WTO that is empty of rules on primary agricultural export barriers has been the implementation of arbitrary policies taken by both the exporting and some importing countries. We conclude that in much the same way that WTO rules on import barriers reduced the high degree of arbitrariness that used to characterize developing countries’ import-substitution policies, multilateral rules on agricultural export barriers would imply a further positive institutional change for the benefit of both exporting and importing countries.