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          Policy Space in Agricultural Markets: Policy Issues in International Trade and Commodities Research Study Series No. 73 (English)
          Report by Alain McLaren, 2016, 26 pages
          Categories: Enterprise Development, Macroeconomic Policy, Trade and Environment

          As an outcome of the Uruguay Round Agreement on Agriculture, all agricultural products now have a bound tariff rate on their imports. This system of bound tariffs combines the rigidity of an upper limit that is independent of future economic conditions but discretion as governments have a whole array of choices in terms of applied tariffs as long as they are set below the bound rate. One recurring argument is that bound rates may limit countries’ policy flexibility, or policy space, in response to particular economic circumstances. This paper looks at the use and availability of this policy space in agricultural markets. This is first done in a descriptive setting, then by assessing what plays a role in determining this space using an empirical analysis.