Agricultural trade reform: the development perspective

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• Agricultural trade reform the development
  perspective
• By Tjalling Dijkstra
• Sustainable Economic Development Department
• Ministry of Foreign Affairs
• The Hague

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Full trade liberalisation

• -wise developing countries gain more than OECD
  countries LDCs gain most
• Largest proportion of gains arises because of
  agricultural trade liberalisation
• In OECD modest impact on av. farm household
• In DCs poverty falls for agr and diversified
  households, rises for non-agr households

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More realistic Doha scenario

• Overall gains reduced and distribution altered
• SSA, Bangladesh a.o. will lose
• Major reasons why some countries lose Negative
  terms of trade effect for net food importers,
  Preference erosion, Increase underemployment when
  smallholder production replaced by imports.

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Turning losers into winners

• Special and Differential treatment
• Support for net food importers
• Compensate preference erosion
• Aid for trade

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1. Special and Differential Treatment

• SDT in agriculture smaller reduction of tariffs,
  longer implementation periods, more sensitive
  products, special products on basis of food
  security, livelihood strategy and rural
  development, 100 DFQF market access for LDCs,
  front loading cotton.
• But Arguments for SDT must be clear.

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2. Support to net food importers

• Implementation Marrakesh decision (1994)
• Little recent progress discussions on ex-ante
  financing mechanism aimed at food importers
  (2002) multilateral Food Import Financing
  Facility (2003)
• Alternative solution improve domestic food
  production and trade ( SDT)

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3. Preference erosion

• Africa agricultural issue related to CAP reform
• Compensation questions
• Take the value of specific preferential access
  agreements or to net adverse effect of MFN
  liberalisation over all?
• Bilateral or multilateral responsibility?
• Focus on specific crops or diversify?

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4. Aid for Trade

• Definition Trade policy and regulations, Trade
  development, Trade-related infrastructure,
  Building productive capacity, Trade-related
  adjustment.
• Strengthen The demand side, The donor response
  (incl. Paris agenda), The bridge between demand
  and response, Monitoring and evaluation.

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What policy makers in DCs ( DGIS) need
Knowledge on (1)

• Consequences of different scenarios for
  different groups of DCs, e.g. 20-20-20, five and
  five, 60 and 15 bln. (answers required quick but
  not dirty)
• Weighing offensive and offensive interests of
  each group of developing countries (e.g.
  Agriculture versus Mode 4 for SSA)

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Knowledge on (2)

• What is the development friendly upper limit of
  specific SDT measures for individual countries
  (e.g. special products, G33 20)?
• Analysis of conflicting interests of different
  developing country groups (e.g. Latin America
  versus ACP countries for tropical products)

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Knowledge on (3)

• Institutional changes required to tackle supply
  side constraints in specified countries
• Diversification scenarios in relation to
  preference erosion
• (lack of) complementarity between multilateral,
  regional and bilateral trade agreements

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In addition

• Coordination and alignment also in research
• Building analytical capacity in the South
• Thank you.