Non-trade Concerns Research Articles

Trade and Progress: The Case of China

China's accession to the WTO is widely understood as an important step towards greater global market liberalization and integration. However, this step has been also perceived in an ambivalent way. On one hand, the global market liberalization would have never been really completed without participation of such a major player as China. On the other hand, many observers articulated concerns about China's ability to integrate into the WTO system. In order to tackle the issues of concern, attention was paid mainly to technical issues, which were seen as a precondition for China's successful integration into the WTO system. For this reason, topics related with market integration, such as e.g. liberalization requirements, as well as topics related with transparency and legal and administrative policies, necessary for securing of just and equitable resolution of commercial and trade disputes, were initially addressed. Still, in the light of the changing and evolving geopolitical climate, it has become more evident that Non-Trade Concerns (NTCs) might be another multifaceted topic requiring special attention. EU and US, becoming increasingly aware of the fact that competition of economies with different level of development might result not only in job losses in developed countries due to relocation of production, but also to general deterioration of environmental, social and health standards, have accentuated the importance of a global consensus on NTCs and their inclusion into EU and US external policies concerning foreign trade and investment. Civil society from the developed world, in general, is afraid that further liberalization may endanger public policies at different levels: environmental protection and sustainable development, good governance, cultural rights, labor rights, public health, social welfare, national security, food security, access to knowledge, consumer protection, and animal welfare. On the other hand, coalition consisting of China and other BRICS countries as well as other developing countries gaining more influence in the WTO and other international fora has been able to articulate discontent with measures adopted by developed countries to address NTCs. The clash between interests of developed and developing countries reveals potential unfairness and inconsistencies of the international system, including the international trade system, which needs to undergo a deep reform to integrate the developing countries' needs. Many of the measures that developed countries introduce to address NTCs were received by developing countries with suspicion, resistance, and even hostility. Developing countries, including China, doubt the authenticity of such considerations and think they might actually hide protectionist purposes. Additionally, developing countries see these measures as an indirect form of western imperialism whereby they will have no choice but to comply with the social, ethical, and cultural values of the developed states. Nonetheless, not only has China undergone serious reforms and adopted new regulations to address the issue of NTCs, but the country has even begun to play an important role in the international negotiations on NTCs-such as those on climate change, energy, culture, and so on. However, at the same time it provides an opportunity for China and other developing countries to defend their interests in a constructive dialogue with developed countries and restructure the system in order to find a necessary balance between globalization and sustainable development or to shape it according to their interests.

A billion dollars a day: the economics and politics of agricultural subsidies

List of Tables and Figures. Preface. List of Abbreviations. Prologue . Chapter 1: Introduction: The Problem of Agricultural Subsidies . Benin. Western Agricultural Subsidies. Organization of the Book. Chapter 2: The Economics of Government Intervention . Introduction. The Invisible Hand. Market Failures. Violation of the Basic Conditions: Imperfect Competition, Information and Risk. Public Goods and Externalities. Income Distribution, Poverty and Inequality. Conclusion. Appendix 2-1: The Theory of the Invisible Hand. Appendix 2-2: The Prisoners' Dilemma. Chapter 3: The Structure of the World Food System . Introduction. Historical Perspectives. The World Food System. Agribusiness, Government and Science. Conclusion. Appendix 3-1: Country and Commodity Classifications used in Statistical Tables. Chapter 4: Global Institutions and the World Trade Organization . Introduction. The World Trade Organization. Agriculture in the WTO. Trade and Development. Appendix 4-1: Comparative Advantage. Chapter 5: The Nature and Scope of Agricultural Subsidies in High-Income Countries . Introduction. Agricultural Policy Objectives and Tools. Agricultural Subsidies in OECD Countries. Effects of OECD Agricultural Subsidies. Conclusion. Chapter 6: U.S. Agricultural Policy: How Not to Save the Family Farm. Introduction. Historical Overview of U.S. Farm Policy. The Impacts of U.S. Farm Subsidies. The Politics of U.S. Agricultural Policy. Appendix 6-1: ERS Farm Typology. Chapter 7: Agricultural Policy in the European Union: Europe's Sacred Cows . Introduction. Agricultural Policy in the European Union. The Impact of the Common Agricultural Policy. Appendix 7-1: Green Currencies and the Re-Nationalization of the CAP. Chapter 8: Agricultural Policy on the Pacific Rim: Non-Trade Concerns Versus Comparative Advantage. Introduction. Japan and Korea. Australia and New Zealand. Conclusion. Chapter 9: Agricultural Policy in Developing Countries: Cheap Food . Introduction. The Developing World. Agricultural Policy in Developing Countries. The Impacts of Agricultural and Trade Policy Reforms. Conclusion. Appendix 9-1: Country Lists. Chapter 10: Conclusion: Whither Agricultural Policy? . References. Index

Non-Trade Concerns and Agriculture in a Post-Doha Environment: Thinking outside the Green Box

International agricultural trade regulation is once again at the heart of the Doha Development Round's collapse. Even if a deal had been reached on the basis of the Draft Modalities on Agriculture, it is not clear that a fundamental problem would be resolved: the relationship between trade and non-trade concerns, crucially the protection of the environment. Currently, members can use domestic support measures for non-trade objectives, but only if they do not impinge significantly on free trade in agricultural products; an ethos reiterated in the Draft Modalities. However, if the ultimate goal of the Agreement on Agriculture is to reduce agriculture support and protection over time so that distortions to the market are removed, it is difficult to reconcile this goal whilst the Agreement simultaneously allows members to use trade-distorting measures to support non-trade objectives. Even if one accepts that the Agreement on Agriculture's goal is freer trade and not free trade per se, this inconsistency is not removed, as a decision still needs to be made regarding what level of ‘protection’ is acceptable at any given time during the operation of the existing rules. Despite suggested changes to the levels of protection in the Draft Modalities, there seems no indication what this acceptable level might be. Until a decision is made to this effect, a conflict exists within the Agreement and the current tension between members will remain. This article argues that the problem is not the existence of a balance between removing trade barriers whilst protecting non-trade concerns, but rather the theoretical approach driving conclusions about how that balance should be achieved. In addition to moving towards a general commitment to the reduction in agricultural support measures, the Agreement on Agriculture also emphasises the need to achieve a ‘ fair and market-oriented trading system’ ‘having regard to non-trade concerns’. Current thinking assumes that fairness is achieved by interpreting rules on the basis of an economic efficiency rationale (free trade): this approach is not inevitable, however, but only reflects contemporary views of trade rules' purpose and how they should be interpreted in the light of that purpose. As our views of trade rules' purpose changes, so the theoretical underpinnings driving the rules' interpretation evolve. This article proposes such an evolution.

Non-Trade Concerns in Agricultural and Environmental Economics: How J.R. Commons and Karl Polanyi Can Help Us

Non-Trade Concerns in Agricultural and Environmental Economics: How J.R. Commons and Karl Polanyi Can Help Us

FRAMING MULTIFUNCTIONALITY: AGRICULTURAL POLICY PARADIGM CHANGE IN SOUTH KOREA AND JAPAN?

the aftermath of the Uruguay Round Agreement on Agriculture (URAA) and the bsequent establishment of the World Trade Organization (WTO), South Korea after Korea) and Japan face some of the most serious agricultural policy adjustment problems of all WTO signatories. Attempts during the last three or four decades to maintain politically acceptable farm income levels within their minifarm structures of agriculture relied upon a combination of protectionist domestic price support, import control, and high tariff policy measures. These policies must be gradually dismantled under the agricultural reform “disciplines” stipulated in the URAA (Nelson, et al. 2001). Ongoing challenges faced by both countries in meeting reform targets are evident in their present ranking among the most protectionist OECD countries in terms of Producer Support Estimates (PSE) used by the OECD in its periodic agricultural policy reviews (see Table 1 below; OECD 2004). I During the course of the URAA negotiations, Korea and Japan, along with the EU and other European countries, insisted that Non-Trade Concerns (NTCs), such as food security and rural socioeconomic stability, be recognized as legitimate rural/agricultural sector policy objectives (Normile and Bohman 2002). The subsequent inclusion of a NTC provision in the URAA accords has provided the impetus for the development of a new multifunctionality (hereafter MF) policy paradigm, codified in such OECD publications as Multifunctionality: Toward An Analytical Framework (2001). In this new paradigm, policy attention is directed to a range of valuable public goods that are co-produced as by-products of agricultural production, but that are not presently marketised in ways that reward producers for their provision. Examples of such by-products, in addition to aforementioned NTC food security and rural socioeconomic stability concerns, include environmental service, aesthetic landscape maintenance, and cultural heritage preservation social amenities. MF proponents argue that such valuable positive externalities of agricultural production may be threatened in regions where agricultural trade liberalization measures jeopardize the survival of the farm sector and surrounding rural communities. Policymakers in Korea and Japan have found MF ideas inviting rationales for continued support of their domestic agricultures in a changing global agricultural

The Doha work programme on agriculture: taking non-trade concerns into account in the market access pillar

The Doha negotiating mandate specifies that non-trade concerns (NTC), such as food security, rural development and environmental protection, shall be taken into account in the WTO agriculture negotiations. The emphasis of the negotiation mandate on NTC is crucial to the overall balance of the mandate and was decisive for many Members when they embarked on the multilateral reform process in agriculture. How NTC should be taken into account is a matter for negotiations. This contribution aims at clarifying certain concepts and providing a basis for such negotiations, focusing on the market access pillar. The paper briefly lists the NTC important to many Members and reviews certain characteristics common to these concerns. The paper explains why the market access provisions are of particular relevance to NTC and how the market access modalities should reflect such concerns.

Non-trade concerns: reconciling domestic policy objectives with trade liberalisation

In seeking appropriate economic policies to address non-trade concerns (NTC), a distinction must be made between those concerns that relate to market failure and the misallocation of resources, and those that relate to distributional issues. To deal with both types of NTC, domestic policies are required that correct for missing institutions or address institutional failure. We identify the NTC that fall into the two categories of NTC and the types of domestic policies that can be used for each type. International policies and agreements, such as those concluded through the World Trade Organisation (WTO), while potentially significant for the liberalisation of international trade, play a secondary and supporting role to domestic policies in addressing NTC. In particular, they are not an efficient means of addressing domestic market failure.

Korea's approach to non-trade concerns in the World Trade Organisation

Non-trade concerns (NTC) are legitimate issues for the WTO. Despite no technical definition being given, food security and environmental protection are referred to as NTC in the Agreement on Agriculture. Trade and policy implications for NTC are under discussion and regarded as the centrepiece of current negotiations. From Korea's perspective, this article identified food security, small-scale family farms, agricultural landscapes and rural viability as the country's key NTC. Based upon newly established concepts of staple or food security crops and the role of domestic production, food security is suggested to be incorporated into all areas of reform commitments. Small-scale family farms and rural viability are also examined within the provisions of the green box.

A decade of debate over non-trade concerns and agricultural trade liberalisation: convergences, remaining conflicts and a way forward

The debate over non-trade concerns (NTC) and trade liberalisation for the past decade is reviewed and convergences and remaining conflicts are identified. It is found that, while the legitimacy of multifunctionality is no longer controversial and there is a convergence of the views on the best policy instrument for addressing NTC, divergent positions regarding the treatment of NTC in market access commitments still remain. It is concluded that the difference in views on the pace and sequence to arrive at targeted payment solution for non-trade objectives is a root cause. The article presents three justifications for gradual trade reform as a way to resolve the conflicts: the lack of information on the implications of trade liberalisation and the irreversible nature of non-commodity outputs, high initial transaction costs for designing targeted payments for non-commodity outputs, and the costs and time for shifting public funds to financing targeted green box payments.

Multifunctional agriculture, non-trade concerns and the design of policy instruments: applications to the WTO agricultural negotiations

This article focuses on how to achieve non-trade concerns (NTC) and multifunctional goals that countries may have with minimal trade-distortion. The term 'multifunctional agriculture' focuses on the issue that agriculture, in addition to the production of food and fibre, also may provide national food security, environmental benefits and viable rural areas. The article claims that multifunctionality hardly can justify the use of market support while it may justify budget support. It is argued that just as a tax is widely accepted as the optimum policy for a negative externality, so should the use of a production-related subsidy or payment be accepted as optimum policy for a positive externality or public good that is produced jointly with or complementary to agricultural production. The article concludes with suggestions for WTO agricultural trade rules to prevent such policies from becoming a form of protectionism.

Including non-trade concerns: the environment in EU and US agricultural policy

The challenge for any trade agreement is to be adaptable enough to enable countries to address legitimate non-trade concerns (NTC) while being restrictive enough to limit harm to other countries and to assist the creation of free international markets. In this paper, we focus on how environmental NTC have been addressed in agricultural policy in the USA and the European Union (EU) and the resulting implications for trade agreements. For example, programmes in the USA discourage production on environmentally sensitive land, while the EU encourages extensive production. While these and other differences will affect production and trade, the different approaches to agri-environmental policy affect the degree to which the two regions can use agri-environmental policy to offset commodity payments. This difference in flexibility will, in turn, affect how easily the two regions can accept a trade agreement that mandates greater reductions in trade-distorting price supports.

Japan's non-trade concerns: legitimate or protectionist?

The purpose of this article is to explain why Japan, with its food self-sufficiency rate at 40%, is at risk from severe tariff reductions and why it should be accorded special dispensations in WTO agreements on agriculture. The main issue evaluated is whether substantial net food importing countries like Japan, with their extremely high-cost agricultures, should be granted some exemptions in trade negotiations in order to meet the goal of a 'fair' and 'equitable' trade system. Included are implications for regional stability, impacts on consumer confidence and concerns about the well-being of all citizens. Studies on purported benefits of consumer welfare in Japan from liberalisation of agricultural trade were found to be flawed due to invalid assumptions and failure to account for losses. It is concluded that exclusions should be adopted as part of non-trade concerns (NTCs) mandated to be taken into account at the WTO agricultural trade negotiations.

Nontrade Concerns: Reconciling Domestic Policy Objectives with Freer Trade in Agricultural Products

Since the conclusion of the Uruguay Round of trade negotiations in 1994, there has been increasing debate about the implications of freer trade for domestic or “nontrade” objectives in agriculture. These range from traditional concerns, such as food security and rural development, to more recent issues such as the relationship between agriculture and the environment, and the effects of agricultural practices on human health and animal welfare. For countries reluctant to reduce agricultural protection, a key issue is the extent to which domestic policy objectives would need to be sacrificed under freer trade. For countries espousing trade liberalization, the issue is whether domestic policy objectives will be used as a guise to undermine freer trade in agricultural products. In this paper, we focus on two areas of concern that are stressed by rich, developed countries—the linkage between agriculture and the environment, and animal welfare. Environmental issues are prominent in Asia, Europe and, increasingly in North America, while animal welfare is a major issue in Europe. It is generally acknowledged that agricultural support, provided through implicit consumer taxes and direct subsidies in developed countries, generates much of the distortion in global agricultural trade. The more than $300 billion of agricultural support that is provided annually by OECD countries, disadvantages developing country exporters and causes distortions in importers. Ensuring that there are effective disciplines on trade-distorting forms of support will be vital to the suc

Non‐Trade Concerns and the Wto Jurisprudence in the Asbestos Case

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