SAIS Review 23.1 (2003) 85-114
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Trade Liberalization in Agriculture
One of the accomplishments that makes the international community most proud is its progress in developing free trade around the world. The establishment of the General Agreement on Tariffs and Trade (GATT) after World War II began the liberalization trend by relaxing barriers on goods. As negotiating sessions proceeded, trade in goods loosened further and other areas also began to open, such as services, intellectual property, and investment measures. Yet, despite all the progress made in breaking down barriers in these areas, those in agricultural markets remained stubbornly high. Why has protection in the agricultural sector persisted? The SAIS Review invited five experts from around the world to participate in a dialogue on agricultural trade liberalization. The participants, Bruce Gardner, Eugenio Díaz-Bonilla, Antônio Salazar P. Brandão, Devinder Sharma, and Alan Swinbank, received an initial statement posing a series of questions about trade in agricultural goods. Each participant then had the opportunity to read and respond to each other's initial statements.
Bruce Gardner is Professor of Agricultural Economics and Chair of the Agricultural & Resource Economics Department at the College of Agriculture & Natural Resources at the University of Maryland.
Alan Swinbank is Professor of Agricultural Economics and Director of the Centre for Agricultural Strategy at The University of Reading. His research focuses on the farm and food policies of the European Union, and the WTO process of agricultural and food trade liberalization.
Devinder Sharma is a New Delhi-based food and trade policy analyst.His recent works include two books: GATT to WTO: Seeds of Despair and In the Famine Trap. Responses can be e-mailed to email@example.com.
Eugenio Díaz-Bonilla is a Senior Research Fellow at the International Food Policy Research Institute in Washington, DC. [End Page 85]
Antônio Salazar P. Brandão has a Ph.D. in Agricultural Economics from Purdue University and is currently Professor of Economics at the State University of Rio de Janeiro (UERJ). [End Page 86]
Since the establishment of the General Agreement on Tariffs and Trade, global tariff levels have declined sharply on most goods. One notable exception is in the agricultural sector. What has made agricultural trade liberalization so difficult? What are the current roadblocks that must be overcome? How could liberalization come to pass—or should it remain a special case and why?
Eugenio Díaz-Bonilla: "Can WTO Agricultural Negotiations Help the Poor?"
Over the last decades, agricultural policies have differed markedly across countries: agriculture was usually taxed by developing countries as part of the drive to industrialize the economy, while developed countries subsidized agricultural production. Although it was not immediately recognized, the bias against agriculture in developing countries also negatively affected the poor, who in many countries depend heavily on that sector for income and employment. Since the late-1980s, that policy bias appears to have been eliminated, or at least reduced, in a number of developing countries. However, the surpluses produced by subsidies to agriculture in rich countries and dumped onto world markets beginning in the 1980s have hurt agricultural development in developing countries and hampered poverty and hunger alleviation efforts. Thus, the persistence of protection and subsidies in rich countries, the main distortion in today's agricultural markets, needs to be addressed by current World Trade Organization (WTO) negotiations.
Historical Perspective 1
In the United States, agricultural policies were a reaction to the Great Depression. The need to support farmers' incomes and family farms and to stabilize prices and supplies provided the main rationale for U.S. agricultural policies. In Europe and Japan, meanwhile, agricultural policy was driven by post-WWII political and economic realities. The war left Europe a devastated territory, suffering food deficits, threatened by internal turmoil, and menaced by the presence of the Red Army. For the United States and the western allies, it was important to develop a strong regional economy to counter the presence of...