department of economics international agricultural trade chad hart 515-294-9911 farm-church...
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Department of Economics Another Quote “Trade liberalization leads to economic gains for both developed and developing countries through more efficient use of resources as well as the productivity and investment growth that come with more open markets.” -- Anne Effland, Mary Anne Normile, and John Wainio, “Global Agriculture and the Doha Round: Market Access Is The Key”, Amber Waves, Sept. 2006TRANSCRIPT
Department of Economics
International Agricultural Trade
Chad [email protected]
515-294-9911
Farm-Church Discussion GroupWest Des Moines, Iowa
September 12, 2008
Department of Economics
Outlook from WTOOn July 27, 2006, Pascal Lamy, Director-
General of the World Trade Organization stated that the failure to reach an agreement on the Doha round negotiations would be a choice to forgo “the best hope for growth and poverty alleviation.”
Department of Economics
Another Quote“Trade liberalization leads to economic gains for
both developed and developing countries through more efficient use of resources as well as the productivity and investment growth that come with more open markets.”-- Anne Effland, Mary Anne Normile, and John Wainio, “Global Agriculture and the Doha Round: Market Access Is The Key”, Amber Waves, Sept. 2006
Department of Economics
Projected PathwayMore open markets
More efficient resource allocation
Higher economic activity values
Higher incomes
Department of Economics
Agriculture: Crucial to Developing CountriesFor most developing countries, agriculture is:1.The largest employer,2.The largest source of GDP,3.The largest source of exports, and4.The largest source of outside funds.
Nearly three-quarters of the world’s poor live in rural areas and are dependent on agriculture for their living.
Source: McCalla and Nash, 2007
Department of Economics
Poverty Rates
Source: McCalla and Nash, 2007
Department of Economics
Agricultural Protection
Source: McCalla and Nash, 2007
Department of Economics
Agricultural Protection
Source: McCalla and Nash, 2007
Department of Economics
Trade Shares
Source: McCalla and Nash, 2007
Department of Economics
Reducing Barriers to TradeAgriculture is seen as the trade area with the
greatest number of distortion and the greatest potential in economic gains from trade reform.
Studies have shown that two-thirds of the potential economic gains from trade reform would come from agricultural trade reform (Anderson, Martin, and van der Mensbrugghe, 2006; Hertel and Keeney, 2006).
Source: McCalla and Nash, 2007
Department of Economics
Negative Size EffectsNet agricultural importers could face higher market
prices for agricultural commodities.Counterpoint: Prices for other products would rise
as well, providing some offset from exportable goods.
Reduction or elimination of preferential market access many developing countries currently have to developed country markets.
Counterpoint: Several studies indicate the economic losses would on the order of $200-300 million worldwide and can be made up with aid.
Source: McCalla and Nash, 2007
Department of Economics
Developing Country PowerDeveloping countries have begun to “flex their
muscles” during the Doha round.
Targeting significant reductions in agricultural trade barriers and domestic support
Specific targeting for liberalization of cotton trade
Source: McCalla and Nash, 2007