Agricultural Trade:Prospects for Liberalization After Uruguay and Doha Rounds

Author

Tsenolo Leche, Southern Illinois University CarbondaleFollow

Date of Award

12-2009

Degree Name

Master of Science

Department

Agribusiness Economics

First Advisor

Moon, Wanki

Abstract

AN ABSTRACT OF THE THESIS OF Tsenolo Leche, for the Master of Science degree in Agribusiness Economics, presented on October 29, 2009, at Southern Illinois University Carbondale. TITLE: AGRICULTURAL TRADE: PROSPECTS FOR LIBERALIZATION AFTER URUGUAY AND DOHA ROUNDS MAJOR PROFESSOR: Dr. Wanki Moon Chapter 1 outlines the goal of the project by evaluating the prospects for agricultural trade liberalization by analyzing the progress and setbacks of the Uruguay and Doha Rounds. The international trade framework is analyzed with consideration of standard trade theory, agricultural protectionism, agricultural trade liberalization efforts and assessment of the prospects for liberalizing agricultural trade in the future. Chapter 2 deals with two issues of standard trade theory: economic rationales for trade and efforts to liberalize trade in industrial goods after World War II. Evidence suggests free trade is a stimulus for growth and development. Empirical evidence suggests liberalization of trade increases economic growth, decreases poverty, increases productivity and increases technology transfer. Global efforts to liberalize trade in industrial goods after World War II are summarized. Efforts to liberalize trade in industrial goods started in 1947 with the formation of the General Agreement of Tariff and Trade (GATT), a multilateral body. Subsequently, the chapter briefly discusses the GATT's accomplishments through its various rounds of multilateral trade talks. It also looks into other channels that the international community pursued to liberalize trade such as regional trade liberalization, one-way trade to developing countries and unilateral trade liberalization. Chapter 3 examines the history of agricultural protectionism in general and in developed countries. Furthermore, it explains theories behind agricultural protectionism. It identifies instruments countries used to protect their agricultural sector before the Uruguay Round Agreement on Agriculture (URAA) and in the post-Uruguay period. Chapter 4 examines efforts to liberalize agricultural trade beginning with the Uruguay Round, and including the GATT multilateral trade talks that brought agriculture under the discipline. It examines the commitments and limitations of the round in agriculture trade liberalization under three pillars of trade namely market access, export competition and domestic support. Subsequently, ongoing Doha Development Agenda Rounds are analyzed. Further, it examines the July 2004 framework and proposals from member countries for advancing agricultural trade liberalization. Chapter 5 measures the influence of the European Union's Common Agricultural Policy (CAP) and the U.S.'s Farm Bills on multilateral agricultural trade liberalization negotiations and their influence on the agricultural policies of both the European Union and the U.S. The impact of multifunctionality of agriculture on multilateral agricultural trade liberalization negotiations is discussed. Finally, the chapter focuses on the various perspectives by examining the roles of developing countries in the evolution of the Doha Development Agenda. Chapter 6 assesses the prospects for agricultural trade liberalization by examining agricultural trade following World War II, the WTO's Uruguay and Doha Rounds and the impact of four members of the WTO on international trade. Chapter 7 concludes that agricultural trade liberalization after the Uruguay and Doha Rounds is not likely to be as free as industrial trade liberalization because of some unique characteristics of agriculture. Based on both the Uruguay and Doha Rounds, the main goal seems to be reduction of trade-distorting domestic supports, improvement of market access and phasing out and eventual elimination of export subsidies.