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Multilateral Trade Liberalisation and Developing Countries: A North-South Perspective on Agriculture and Processing Sectors

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  • van Tongeren, Frank W.
  • van Meijl, Hans

Abstract

This paper assesses the impact of further trade liberalisation on prototypical groups of developing countries, with special attention to the linkages between trade and development of the agri-food sector. The findings of this paper are based on a new country classification approach which uses a combination of income- and trade criteria. We distinguish between developing countries whose producers compete with OECD producers in primary and/or processed agricultural products versus those countries that are not competing. We are also able to single out countries which are potentially able to develop their agricultural sector and those that will in all likelihood never be able to do so. In a second step, a quantitative study is conducted of the impact of further liberalisation on developing countries. Here, we are able to pinpoint diverging (and common) interests among (groups of ) developing countries, based on our novel country classification. The quantitative assessment uses the GTAP modelling framework as a tool, with a recent version (5.2 pre-release) of the GTAP database. Partial agricultural trade liberalisation is expected to generate positive economic effects in general. An important exception are the low-income exporters of primary agricultural commodities, which see a fall in net-exports as a result of stiffer competition their key markets. Extending liberalisation in trade alone to reforms of domestic agricultural policies in high income countries is not as advantageous to developing countries as often thought. While our findings support the widely held view that developing country importers are expected to face higher import prices, we also find that policy reform in high income countries may lead to production shifts away from currently supported crops towards other activities which compete directly and indirectly with developing country exports (e.g. sugar and horticultural products). Including trade liberalisation in agri-processing industries is expecte
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  • van Tongeren, Frank W. & van Meijl, Hans, 2006. "Multilateral Trade Liberalisation and Developing Countries: A North-South Perspective on Agriculture and Processing Sectors," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25462, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25462
    DOI: 10.22004/ag.econ.25462
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    References listed on IDEAS

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    1. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 107-125.
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    7. Rau, Marie-Luise & van Tongeren, Frank W., 2006. "Modeling Differentiated Quality Standards in the Agri-Food Sector: The Case of Meat Trade in the EU," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25739, International Association of Agricultural Economists.
    8. Anderson, James E., 1998. "Effective protection redux1," Journal of International Economics, Elsevier, vol. 44(1), pages 21-44, February.
    9. Joseph Francois & Hans Van Meijl & Frank Van Tongeren, 2005. "Trade liberalization in the Doha Development Round [Trade in Manufactures, the Outcome of the Uruguay Round and Developing Country Interests]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(42), pages 350-391.
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    1. Francois, J. & van Meijl, H. & van Tongeren, F., 2003. "Economic Implications of Trade Liberalization Under the Doha Round," Conference papers 331101, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Raihan, Selim & Razzaque, Mohammad A, 2007. "WTO and regional trade negotiation outcomes: quantitative assessments of potential implications on Bangladesh," MPRA Paper 38475, University Library of Munich, Germany.
    3. Conforti, Piero & Velazquez, Beatriz E., 2004. "The Effects of Alternative Proposals for Agricultural Export Subsidies in the Current WTO Round," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 5(1), pages 1-26.
    4. Oskam, Arie J. & Meester, Gerrit, 2006. "How useful is the PSE in determining agricultural support?," Food Policy, Elsevier, vol. 31(2), pages 123-141, April.
    5. Conforti, Piero & Velazquez, Beatriz E., 2003. "The Effects Of Alternative Proposals On Export Subsidies To Agricultural Products In The Current Wto Round," Working Papers 14801, National Institute of Agricultural Economics, Italy - INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    6. Achterbosch, Thom J. & de Bruin, S. & van Tongeren, Frank W., 2003. "Trade Preferences For Developing Countries," Report Series 29102, Wageningen University and Research Center, Agricultural Economics Research Institute.
    7. Raihan, Selim & Khondker, Bazlul Haque, 2010. "Doha Round Impacts on India: A Study in a Sequential Dynamic CGE Framework," MPRA Paper 37897, University Library of Munich, Germany.
    8. Hess, Sebastian & von Cramon-Taubadel, Stephan, 2007. "Assessing general and partial equilibrium simulations of Doha round outcomes using meta-analysis," University of Göttingen Working Papers in Economics 67, University of Goettingen, Department of Economics.

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