Regulation of Agricultural Trade and Its Implications in the Reform of the CAP. The Continental Products Case Study

Francisco J Castellano-Álvarez,Francisco M Parejo-Moruno,J Francisco Rangel-Preciado,Esteban Cruz-Hidalgo

doi:10.3390/agriculture11070633

Francisco J Castellano-Álvarez, Francisco M Parejo-Moruno + Show 2 more

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https://doi.org/10.3390/agriculture11070633

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Journal: Agriculture	Publication Date: Jul 7, 2021
Citations: 6	License type: CC BY 4.0

Affiliation: University of Extremadura

Abstract

The evolution of the Common Agricultural Policy (CAP) has been conditioned by a number of factors. Among them is the so-called external aspect of the CAP on which this work focuses, being the main objective to analyze the relationship between the evolution of the CAP and the negotiations leading to the liberalization of international agricultural trade, which were held within the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). In the same way, we also consider the consequences for European agricultural foreign trade derived from the commitments assumed by the European Union (EU) in those two negotiating forums. To achieve these objectives, this research proposes two working lines: first, a literature review for better understanding how international agricultural trade has been regulated since the end of the Second World War to the present, and second, a research effort to know the possible implications that said regulation have had for the evolution of European agricultural foreign trade. In this latter case, the issue is addressed through an empirical analysis using two of the main specialized statistical databases in international trade: EUROSTAT and COMTRADE. The results of the research show that, as the changes introduced by the CAP reforms have been consolidated (based on the trade commitments assumed by the EU), there has been a gradual decrease in the share of European exports in the international markets for continental products.

Highlights

The Common Agricultural Policy (CAP) has been one of the best examples of a truly common policy for all countries participating in the European integration process
García Álvarez-Coque and Compés [1] or Bonete [2] have studied the factors that conditioned the evolution of the CAP, differentiating between: (a) internal factors, such as budgetary limitations, the imbalances fostered between different crops, farms and territories, and the surpluses generated over decades in many of the typically continental areas of production; and (b) external factors, such us the repeated pressures exerted by many of our trading partners regarding European agricultural protectionism and the effects that some of the measures applied by the CAP have had on international agricultural markets
At the beginning of the series studied, both variables remained at similar levels, making a gap that began to be pronounced in the early 2000s

Summary

Introduction

The CAP has been one of the best examples of a truly common policy for all countries participating in the European integration process. In line with the McSharry reform, Agenda 2000 supposed a further reduction in guaranteed prices for some of the most surplus products (cereals, dairy, and beef) and partially offset the effects that this reduction could have on farm incomes with an increase in direct aid. These measures would reduce aid from the Amber Box in favor of other aid that, by virtue of what was agreed to in the Uruguay Round, would be attributed to the

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