Think Piece

Do Yesterday’s Disciplines Fit Today’s Farm Trade? Challenges and Policy Options

By Jean-Christophe Bureau, Sébastien Jean
December 2013
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This piece explores how trade and trade policies have evolved over the last decade and considers the possible implications for the multilateral trading system. Since the Doha Round was launched, the importance of developing countries in world trade of agricultural products has increased dramatically. World markets are seeing higher prices, after trending downward for decades. The development of biofuels has had considerable impact on price levels and market adjustment mechanisms, with the risk of rigidifying crop demand. There has been a downward trend in applied tariffs as a result of unilateral liberalisations as well as regional trade agreements. Despite a number of recent protectionist measures, the current economic crisis has not reversed this trend. Non-tariff measures have also spread, especially in emerging countries, and the proliferation of regional trade agreements has influenced international trade patterns. After the 1994 Marrakesh Agreement, many developed countries reduced the most distorting forms of agricultural support, but recent policy decisions have reversed this trend. Several emerging countries have increased their subsidies to farmers. In addition, some of the disciplines introduced by the 1994 Marrakesh Agreement have lost their efficacy.

While export subsidies and related distortions on the world market have shrunk, export restrictions have become more common. Against this background, we argue that the negotiations should be refocused and, in some cases, rescaled. Doha Round negotiators may have overplayed their hand by understating the cost of failure: scaling down ambition may help in reaching an agreement.

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