The Consequences of Agricultural Trade Liberalization for Developing Countries: Distinguishing Between Genuine Benefits and False Hopes

Equity, efficiency, security and liberty are the four main policy goals in a society. This paper examines the current trade-offs of these goals with agricultural trade liberalization for developing countries. Trade liberalization may cause contradictory results for developing countries. While trade liberalization may improve the welfare of a country, the distribution of income in that country may deteriorate. Efficiency, on the other hand, is another concept that depends not only on who defines it, but also on how it is defined. Liberalized trade may increase the efficient use of resources; however, it may also harm sustainability. Free trade may pave the way for liberty; however, new regional trading blocs may curtail the free choice of states, causing greater interdependence. Trade data over recent years show a decreasing share of total trade in developing countries despite an increase in the absolute value. Thus, liberalized trade in agriculture could help developing countries to achieve these universal goals if it were accompanied by decisive reforms and supported by international consciousness.

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The consequences of agricultural trade liberalization for developing countries: distinguishing between genuine benefits and false hopes

World Trade Review ◽

10.1017/s147474560600276x ◽

2006 ◽

Vol 5 (2) ◽

pp. 225-249 ◽

Cited By ~ 18

Author(s):

JEAN-CHRISTOPHE BUREAU ◽

SÉBASTIEN JEAN ◽

ALAN MATTHEWS

Keyword(s):

Developing Countries ◽

Trade Liberalization ◽

Agricultural Sector ◽

Developed Countries ◽

Agricultural Trade ◽

Free Access ◽

Least Developed Countries ◽

Sub Saharan ◽

Agricultural Trade Liberalization ◽

The Impact

Recent analyses suggest that the impact of agricultural trade liberalization on developing countries will be very uneven. The Doha Round focuses on tariff issues, but some developing countries currently have practically duty-free access to European and North American markets under preferential regimes. Multilateral liberalization will erode the benefits of these preferences, which are presently rather well utilized in the agricultural sector. While South American and East Asian countries should benefit from an agricultural agreement, African and Caribbean countries are unlikely to do so. The main obstacles to the exports of the sub-Saharan African and Least Developed Countries appear to be in the non-tariff area (sanitary, phytosanitary standards), which increasingly originate from the private sector and are not dealt with under the Doha framework (traceability requirements, etc.). An agreement in Doha is unlikely to solve these problems and open large markets for the poorest countries. While this is not an argument to give up multilateral liberalization, a more specific and differentiated treatment should be considered in WTO rules, and corrective measures should be implemented.

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