Agricultural Trade and the Doha Round: Lessons from Commodity Studies

While global analytical approaches to agricultural trade liberalization yield large gains for most economies, there are substantial variations in the policy regimes across commodities. To clarify the multiplicity of distortions and impacts, the World Bank's Trade Department undertook a series of commodity studies. The studies highlight the important challenges faced by negotiating countries in the Doha Round of the World Trade Organization (WTO) trade negotiations. The studies provide a sharper look at the North-South dimensions of the agricultural trade debate, with the North's trade barriers, domestic support, and tariff escalation. They also underscore the South-South challenges on border protection and the reduced rural income opportunities for the lowest-income countries due to policies in higher-income countries that depress world prices. Agricultural trade liberalization would induce significant price increases for most commodities. The studies identify the detrimental effects of multilateral trade liberalization for some countries because of lost preferential trade agreements and higher prices on net consumers of commodities. Given the complexity of specific issues in agriculture, as well as the North-South and South-South dimensions of distortions, a global solution would be required to liberalize these markets. Rather than being self-contained, agricultural trade negotiations should involve concessions on other sectors and issues (services and intellectual property rights for example) to identify overall reform packages palatable to all parties.