WTO Public Symposium 2003: Agriculture
Agriculture: Recent
Changes in Global Trade in Agricultural Goods
The situation of least developing countries and net
food-importing countries under the current global agricultural trading
regime is problematic because it endangers their food security.
Because these countries generally do not have the capacity to
produce in sectors other than agriculture, their only source of foreign
exchange is through exporting their agricultural products.
However, the tariff barriers that industrial countries have kept
under the Agreement on Agriculture have made it particularly difficult for
these products to reach those markets.
As a result, LDCs and net food-importing countries are left without
the foreign exchange they need to purchase food imports to feed their
populations.
The issue of food security for LDCs and net food-importing
developing countries is explicitly recognized in the Agreement on
Agriculture, and a separate document was drafted during the Uruguay Round,
entitled “Decision on Measures Concerning the Possible Negative Effects
of the Reform Programme on Least Developed and Net Food-Importing
Developing Countries”. In
the decision, developed countries are expected to provide food aid to
countries who qualify as LDCs or net food-importing countries, and to
provide technical assistance in helping those countries’ agricultural
sectors improve in productivity and infrastructure.
However, the decision is not legally binding, and as a result
certain countries have been suffering under the environment which has
resulted from the Agreement on Agriculture.
The issue of implementation of this decision has been raised for
the Doha Round, and will certainly be a topic of discussion in the
upcoming negotiations.
Another important issue that arose after the Agreement on Agriculture is
the US’s new Farm Bill, passed in 2002, which increases government aid
to US farmers by 80% over ten years. Although the bill limits the amount
of aid to $19.1 billion per year, the limit on subsidy and aid that the
WTO has placed upon the US, almost all other countries have been outraged
at the amount of aid it provides, feeling that the policy violates the
spirit of the Agreement on Agriculture, and runs counter to the US’s
original advocacy of trade liberalization in agriculture.
Part of the bill is a counter-cyclical program under which the US
government will make up the difference between the market price of
agricultural goods and predetermined target prices.
Many have complained that this policy encourages massive
overproduction of agricultural goods, and that the surplus will drive down
world prices for those goods, making it particularly difficult for farmers
in developing countries to compete.
Visit these pages for more information on trade in
agriculture:
Additional Sources
Agreement
on Agriculture
Decision
on Measures Concerning the Possible Negative Effects of the Reform
Programme on Least Developed and Net Food-Importing Developing Countries
Farm
Bill 2002
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