Agricultural Trade Policy: Completing the Reform

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The Uruguay Round trade negotiations marked a historic turning point in the reform of agricultural trade. The Uruguay Round Agreement on Agriculture (URAA) replaced nontariff barriers with bound tariffs, curbed export subsidies, and codified domestic agricultural problems. Unfortunately, the URAA bound many of the tariffs that replaced nontariff barriers too high, thereby legitimizing export subsidies, and leaving the domestic farm policies of the major industrial countries ...
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Overview

The Uruguay Round trade negotiations marked a historic turning point in the reform of agricultural trade. The Uruguay Round Agreement on Agriculture (URAA) replaced nontariff barriers with bound tariffs, curbed export subsidies, and codified domestic agricultural problems. Unfortunately, the URAA bound many of the tariffs that replaced nontariff barriers too high, thereby legitimizing export subsidies, and leaving the domestic farm policies of the major industrial countries largely untouched.

Fortunately, regional trade institutions have also begun to grapple with agricultural trade liberalization. Agriculture was featured in the Mercosur agreement, in recent agreements between the European Union and the countries of Central and Eastern Europe, and in the North American Free Trade Agreement (NAFTA). Plans for broad supraregional trade structures, such as the Asia Pacific Economic Cooperation (APEC) forum and the Free Trade Area of the Americas (FTAA), have also dealt with the inclusion of agricultural trade. Meanwhile, in developing and middle-income countries, unilateral agricultural policy reforms have been part of recent economic policy changes. However, in the industrial countries, agricultural policy reform has languished in the face of much domestic opposition. But the reform of the European Union's Common Agricultural Policy (CAP) in 1992 and the 1996 Farm Bill in the United States seems to have ushered in a new era of relations between government and agricultural groups.

The author points out ways that multilateral, regional, and unilateral paths could be coordinated to liberalize agricultural trade. He proposes a set of multilateral talks that would benefit from agricultural reform at all levels and complete the job begun at the Uruguay Round.

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Product Details

Table of Contents

Preface vii
Acknowledgments xi
1 Introduction 1
2 The Case for Further Reform of Agricultural Trade 5
Reducing Levels of Agricultural Import Protection 6
Restraining Agricultural Protection in Asia 10
Securing Agricultural Policy Reform in the West 13
Reducing Damaging Trade Conflicts 18
Including Agriculture in Global Trade Liberalization 19
3 The Current Status of Agricultural Trade Reform 23
The Uruguay Round as a New Point of Departure 24
The Implementation of the Agreement 35
Developments in Domestic Agricultural Policy 49
Regionalism and Agriculture 67
4 The Climate for Further Reform of Agricultural Trade 75
Global Agricultural Market Developments 75
New Issues and Challenges for Trade Rules 84
5 Next Steps in Agricultural Trade Policy Reform 91
Further Steps in Domestic Reform 91
The Regional Path to Freer Agricultural Trade 96
The Way Forward in Multilateral Talks 109
The Next Round of WTO Negotiations on Agriculture 110
6 Conclusion 119
Ten Propositions on the Next Steps in Trade Reform 120
Suggestions for a Plan of Action 123
References 129
Tables
Table 1 Average unweighted ad valorem bound tariff rates, post-Uruguay Round, for 10 agricultural products in 20 countries 7
Table 2 Nominal rates of protection for agricultural commodities: Japan, South Korea, and Taiwan, 1955-82 11
Table 3 Agricultural policy transfers by country, 1986-96 14
Table 4 Producer subsidy equivalents (PSE) and nominal assistance coefficients (NAC), OECD countries, 1986-96 15
Table 5 Share of world value added in agriculture and manufacturing 20
Table 6 US implementation of market access provisions, FY 1995 37
Table 7 US export subsidy commitments and actual outcomes, FY 1995 38
Table 8 Tariff bindings for selected Latin American countries 41
Table 9 Implementation of the market access provisions in the European Union, 1995-96 43
Table 10 Japanese imports of goods subject to tariff rate quotas 45
Table 11 Comparison of the EU MacSharry reform (1992) with the US FAIR Act (1996) 65
Table 12 Mercosur common external tariff (CET) for agricultural goods 69
Table 13 Major state trading enterprises: importers 87
Table 14 Major state trading enterprises: exporters 88
Table 15 Matrix of negotiating options 98
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