CIAO DATE: 08/07

Georgetown Journal of International Affairs

Georgetown Journal of International Affairs, Volume 7, Number 2, Summer/Fall 2006

 

Tear Down Those Walls: Agriculture, Development, and Trade Negotiations
Kimberly Ann Elliott

 

Excerpt

Kimberly Ann Elliott, a research fellow, has been associated with the Institute for International Economics since 1982. She also holds a joint appointment with the Center for Global Development.

The formal name of the current round of international trade negotiations is the “Doha Development Agenda,” and conventional wisdom is that the key to bringing it to a successful conclusion is meaningful liberalization of agricultural markets by the rich countries. Most quantitative analyses show that agriculture is where the bulk of the potential gains from trade liberalization are because that is where the greatest barriers persist in the largest, richest markets. But would rich-country liberalization of agricultural trade be enough to deliver on promises to make Doha a “development round?”

Many developing countries, to be sure, have a comparative advantage in agriculture, and many of the world’s poor live in rural areas. It is logical, therefore, that increased access to agricultural markets has emerged as a central issue in these talks. Developing countries—and groups within them—are diverse, however, and farm policy reforms in rich countries will affect different groups in different ways. While it is true that farmers stand to benefit from higher world prices for agricultural products, poor consumers could lose. Some countries may benefit from liberalization of rich countries’ agricultural sectors, while others may see their preferential access to developed markets erode. Within countries, many rural poor live in remote areas that are isolated from national, much less international, markets. Increased agricultural trade would affect them very little.

Connecting the poor to markets and increasing demand for their products, including through exports, would indeed help to reduce global poverty, but increased market access alone will not be enough to achieve that goal in all cases. Many countries, especially the poorest, also need to adopt complementary policies to create an environment in which the poor can grasp new trade opportunities and the losers are compensated.

In making this case, the first section of this essay presents evidence on the nature of agricultural protection in rich countries and then on the size and distribution of potential gains from reducing it. The second section discusses the relative levels of rich-country agricultural trade restrictions today and argues that, because such restrictions are high compared to those in other sectors, the agricultural sector holds the greatest potential for realizing gains from further trade liberalization. The third section will then address the diversity within and among poor-country exporters and its implications both for the distribution of potential gains from agricultural trade liberalization, as well as the need for complementary policies in poor countries to help manage the adjustment to more open markets. The final section concludes with some prescriptions and recommendations...