Evolving Structure of World Agricultural Trade and Requirements for New World Trade Rules

The recent world food crisis of 2007-8 alerted the world and policy makers to the fact that global agricultural productivity growth has been slowing down, and highlighted the fact that current national agricultural trade policies and the current world trade rules as agreed in the WTO Agreement on Agriculture may not be adequate to prevent such crises in the future. At the same time changes in climate may be precursors of more potential food crises, with significant negative impacts on many poor across the world. This necessitates a reconsideration of the factors that drive long term agricultural trade, and the needs of future global agricultural trade rules. The objective of this paper, is to highlight and analyze several factors impinging on future agricultural trade developments, in order to identify possible needs for future global agricultural trade rules. The paper first documents the recent food events and discusses factors behind these developments. It analyses the pattern of global agricultural market instability over the past 40 years and the factors that may affect it in the futures. New challenges facing the world agricultural trade system are analyzed next. Then a discussion of the growing vulnerability of some developing and least developed countries is illustrated. The paper finally tries to identify areas where the WTO system of rules on agricultural trade may need strengthening or adaptation.