DP2096 Developing Country Agriculture and the New Trade Agenda

Author(s): Kym Anderson , Bernard Hoekman

Publication Date: March 1999

Keyword(s): Agricultural Policy , WTO , Economic Development , Trade Negotiations

JEL(s): F13 , K33 , Q17 , Q18

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP2096.asp

A new round of WTO negotiations on agriculture, services and perhaps some other issues is expected to be launched in late 1999. To what extent should those negotiations include so-called "new trade agenda" items aimed at ensuring that domestic regulatory policies do not discriminate against foreign suppliers? We argue in this paper that while market access negotiations should be given priority, as the potential welfare gains from liberalizing access to agricultural (and services) markets is still huge, the new issues should be included too. This is because they would increase the role of market disciplines in the allocation of resources in the agricultural sector itself, and would ensure non-agricultural groups with interests in the new issues take part in the round to counter-balance forces favoring agricultural protection. We also argue, however, that rule-making efforts to accommodate the new issues should be de-linked from the agricultural market access negotiations, because the issues affect all sectors of activity.