1998, Volume 1, Paper 10
ISSN: 2209-6612

Unfinished business – global trade reform in agriculture

Mr Lyall Howard – National Farmers Federation, Canberra

Introduction

Trade in food and agriculture is the most distorted part of world trade. But reform through multilateral negotiations can yield multi-billion dollar benefits.

In 1999, the World Trade Organisation (WTO) will meet to decide how to mount a new round of global trade negotiations in agriculture. Without diminishing the achievements of the Uruguay Round, trade negotiators this time face a mountain of unfinished business.

The Uruguay Round accomplished more in agricultural trade reform than had ever been achieved before. The conversion of non-tariff barriers to tariffs was a huge feat, but the resulting tariffs often seem incredibly high. Compared with industrial goods, where successive rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) have reduced tariffs on manufactures to an average of just 3.8 per cent in rich countries 1, agriculture has barely a ‘foot in the door’. Dairy is a sector where extreme cases of high tariffs can be found. Canada’s Uruguay Round commitments will see over-quota tariffs on butter fall from 343% in 1996 to 299% by 2001. This ‘liberalisation’ is not expected to result in a significant increase in trade 2.

Fortunately, the Uruguay Round Agreement on Agriculture included a ‘continuation clause’ for further talks on trade liberalisation in 1999. The question is whether that opportunity can be seized – or whether those countries that want to ‘s the clock’ on trade reform will successfully delay the process, possibly for years.

Download full document here