36 Given these qualifications, Table 14 summarizes<sup>SMART projections of the UR effects</sup> on regional country exports to the EC,<sup>Japan and United States.7</sup> These estimates are expressed as percentage changes from a<sup>1992 trade base and in overall dollar terms (see the</sup> right-most column of the table). These data<sup>suggest the UR liberalization of these major OECD</sup> markets' trade barriers could increase all regional<sup>countries' exports by $800 million -- an</sup> annual change of less than one percent. This<sup>is the estimated net effect of: (i) trade losses on</sup> products receiving preferences, and (ii) gains<sup>of products facing MFN duties that were lowered.</sup> However, due to the erosion of their preferences<sup>Israel, Syria and Libya are projected to</sup> experience overall losses from the Round.

Several specific points should be noted regarding<sup>these projections. First, they admittedly</sup> understate regional countries' trade gains<sup>since they do not account for a IJR liberalization of</sup> barriers in countries like Australia, Canada,<sup>New Zealand and EFTA.</sup> If the same import response occurs in these markets as that projected<sup>for the EC, Japan and United States regional</sup> country gains could be approximately $100 million<sup>higher. Second, the projections do not fully</sup> incorporate the effects of the erosion of intra-OECD<sup>preferences (they do, however, account for</sup> reductions in EFTA's preferences in the EC).<sup>Some regional countries may achieve trade gains</sup> by displacing this exchange. Finally, the projections do not incorporate<sup>any estimates of the</sup> trade effects of the removal of MFA and other<sup>nontariff measures. For some regional countries</sup> the impact of the NTM removal may be negative.<sup>(see part C which follows).</sup>

# C. Elements of the Negotiations on Nontariff Barriers

The UR made important progress in liberalizing<sup>nontariff measures -- especially in</sup> agriculture, textiles and clothing. Basically, what<sup>was achieved can be summarized as follows,</sup> Agriculture. NTM restrictions are subject to "tariffication" with<sup>subsequent cuts by industrial countries</sup> of 36 percent over 6 years with a minimum reductions<sup>of 15 percent on all tariff lines. There are a few exceptions</sup> and, in these cases, 4 percent of domestic consumption<sup>in the 1986-88 period is a minimum access guarantee that</sup> must increase by 0.8 percent annually to 8 percent<sup>over the implementation period. Market access for agricultural</sup> products will involve the elimination of quantitative<sup>restrictions and other government interventions. Reductions</sup> of 36 percent were also negotiated in budgetary<sup>outlays on export subsidies and in quantities of subsidized exports.</sup> Textiles and Clothin . The MFA will be phased out.<sup>Products accounting for not less than 16 percent of</sup> the total 1990 volume of imports covered by the MFA<sup>are to be integrated into GATT in 1994 upon entry into force</sup> of the World Trade Organization. After the third year of<sup>the phase-out period, at least an additional 17 percent of</sup> the total 1990 import volumes are to be integrated,<sup>followed by at least an additional 18 percent after the seventh</sup> 7These projections are based on an across-the-board reduction of MFN tariffs of approximately 40 percent except in the case of agriculture, textiles and clothing.<sup>In agriculture, estimates of NTMs nominal equivalents were</sup> drawn from Laird and Yeats (1991) and these measures<sup>were reduced bv 36 percent. The simulations for textiles</sup> and clothing are based on a 20 percent reduction of<sup>nominal equivalents published in World Bank (1992) and Laird</sup> and Yeats (1991) over the 10 year phase out period<sup>specified in the draft agreement.</sup>