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How Will Agricultural Trade Reforms in High-Income Countries Affect the Trading Relationships of Developing Countries?

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Author Info

  • Beghin, John C.
  • Roland-Holst, David
  • Van der Mensbrugghe, Dominique

Abstract

The next three-year WTO round has been set in motion by recent negotiations in Doha, Qatar. Among the most contentious issues in that meeting, and probably over the course of the next round, is direct and indirect producer support for agricultural exporters in the North and forgone production, employment, and trading opportunities for farmers in the South. Our results indicate that real commitments to reduce agricultural support in high-income countries will induce substantial changes world food prices, domestic agricultural rates of return and output, and dramatic shifts in agricultural trade patterns. Total trade expands and real output, wages, and incomes in developing countries, especially among the rural poor, increase substantially. In particular, rural incomes in low and middle income countries increase by over $60B, a figure that comfortably exceeds even the most ambitious goals for increased development assistance and a substantial savings to OECD taxpayers. At the same time, EU and Japanese agricultural exports fall sharply and their imports rise. Other OECD countries see more balanced aggregate trade growth, but a number of strategic sectors are still adversely affected. These facts are likely to complicate negotiations in the Doha Round significantly.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10665.

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Date of creation: 05 Jun 2002
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Handle: RePEc:isu:genres:10665

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Web page: http://www.econ.iastate.edu
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Cited by:
  1. Hoekman, Bernanrd & Ng, Francis & Olarreaga, Marcelo, 2003. "Reducing agrcultural tariffs versus domestic support : what's more important for developing countries?," Policy Research Working Paper Series 2918, The World Bank.
  2. Beghin, John C. & Diop, Ndiame & Matthey, Holger, 2003. "Groundnut Trade Liberalization: Could the South Help the South?," Staff General Research Papers 10875, Iowa State University, Department of Economics.
  3. Paul Schure & G. Cornelis van Kooten & Yichuan Wang, 2007. "Challenges for Less Developed Countries: Agricultural Policies in the EU and the US," Working Papers 2007-08, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  4. Anderson, Kym, 2004. "Agricultural trade reform and poverty reduction in developing countries," Policy Research Working Paper Series 3396, The World Bank.
  5. Matthey, Holger & Diop, Ndiame & Beghin, John C. & Sewadeh, Mirvat, 2003. "The Impact Of Groundnut Trade Liberalization: Implication For The Doha Round," 2003 Annual meeting, July 27-30, Montreal, Canada 22032, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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