> POLICY RESEARCH WORKING PAPER 1353

# Summary findings

In the policy environment prevailing before implementation of the Uruguay Round results, exports from developing countries face significant nontariff measures in industrial countrics.

Based on 1992 trade flows, the import covcrage ratio of nontariff measures on this trade was more than 18 percent, compared with less than 11 percent for trade among industrial countries.

Trade liberalization measures agreed to in the Uruguay Round will dramatically reduce the incidence of nontariff measures on developing country exports: the coverage ratio will drop to less than 4 percent on nonoil exports.

This change has the dual effect of increasing export market opportunities for developing counrr.-es and of substantially reducing - if nor eradicating - the relatively negative bias against developing country exports.

These impressive results from the Uruguay Round are attributable to -tariffication" in agriculture, the abolition of the Multi-Fibre Arrangement (MFA), and the elimination of voluntary export restraints (VERs) under the safeguards agreement But all these aspects of liberalization will not happen instantaneously when the Uruguay Round results come into force. Agricultural tariffication will occur immediately, but the MFA will be phased out over ten years and VERs will be eliminated over four years.

Considering rhe cxtent of the liberalization presaged by these policy changes, Low and Yeats speculate about likely souxres of pressure for measures to mitigate the effects of removing nontariff measures. They conclude that the greatest risks will probably come from safeguards and antidumping.

The new safeguards agreement permirs the use of quantirative restrictions ro stem the flow of injurious imports, and alrhough rhe agreemenr tightens exisring GATT rules in some respects, it loosens them in others.

The antidumping instrument has been used with increasing frequency by an increasing number of countries in the past two decades or more. The efforts of several governments in the Uruguay Round to impose additional controls on antidumping met with little success, and antidumping continues to offer considerable scope for imposing protectionist trade measures.

This paper-a productof the International Trade Division, International Economics Department-is part of a larger effort in the department to analyze and predict structural changes in trade and to quantify factors affecting developing countries' exports. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Jean Jacobson, room _R2-055,_ extension 33710 (25 pages). August 1994.

_Te Poliy Researc Working Paper Seies disseminates the fmndhgs of wAork in progress to encourage she exchange of idas about developnent isse. An obectiveof tbe siesistogetthefindisoutquicly, evenif tbe presentationsare kss thanfuily polished Tec papers carry the names of the ausdors and sbould be used and cited accordigly. The findings, interpretations, and conclusions are the authors' own and should not be attribzed to the World Ban, its Executive Board of Dlractors, or any of its member countrie_ Produced by the Policy Research Dissemination Center