Agricultural Liberalization in the Doha Round

Abstract

Agriculture is an urgent and vital problem for developing countries, and even more so for the poorest countries that are often dependent on a very small set of commodities, many of which are highly subsidized and protected in the OECD countries. The Uruguay Round brought agriculture into the WTO legal framework, but did not lower the effective level of OECD farm protection after 1995 and granted many exceptions to WTO rules that reinforced agricultural protection. While there are a number of diverging forces that are potential sources of change in the levels and patterns of agricultural protection, the recent farm policies adopted by the U.S. and EU reflect an absence of significant domestic reform and appear to be going in the wrong direction. The analysis of agricultural liberalization reveals very large potential gains for both developed and developing countries that will come especially from own-country liberalization as well as from inter-country trade, significant benefits that may be realized by the poorest developing countries, and limited benefits from existing preferential agricultural arrangements. An ideal program for agricultural liberalization in the Doha Round would involve substantial reductions in the high tariffs that exist in both developed and developing countries using the Swiss formula approach and limiting exceptions and special and differential treatment, elimination of agricultural export subsidies, and making meaningful reductions in domestic supports. The negotiations should not get hung up on issues of food security and the effects of higher prices for low-income consumers, and a special safeguard for agriculture is not recommended. It is imperative that agricultural liberalization should be combined with appropriate domestic policies and actions and international assistance, if needed, to help finance emergency food inventories and aid to disadvantaged groups. Patrick A. Messerlin is Professor of Economics at the Institut d'Etudes Politiques de Paris (Sciences Po) and director of the Groupe d'Economie Mondiale de Sciences Po (GEM) which is an independent research center seeking to improve the performance of French and European public policies in a global world. In 2002-2005, he was co-chairman with Dr Ernesto Zedillo, Former President of Mexico, Director of the Yale Center for the Study on Globalization, of the Task Force on Trade in the UN Millenium Development Goals Project, which produced a Report on Trade for Development released in May 2005. In 2001-2002, he was special advisor to Mike Moore, WTO Director General. He has published a dozen books and a hundred papers on trade theory and policy. His most recent book is Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s, Institute for International Economics (Washington) 2001.