Most experts agree that agricultural trade liberalization will bring net benefits to countries. Throughout the world eliminating or reducing trade barriers is, however, one of the most complex tasks of the current agenda of multilateral and regional negotiations.
In the wealthy nations, agriculture is a politically sensitive sector, subject to strong lobbying from interest groups. Some emerging countries have shown remarkable gains in efficiency in agricultural production, and therefore have become more competitive. As a result, they expect negotiations to bring greater liberalization. The small economies depend on preferential access for certain strategic products; several of them also protect their markets through the use of import tariffs, which represent a significant source of revenue.
How are these dissimilar and often conflicting interests to be reconciled? In October, experts in trade, agriculture and integration met at IDB headquarters in Washington to address that question. The seminar was on "Agricultural Liberalization and Integration: What to Expect from the the Free Trade Area of the Americas (FTAA) and the World Trade Organization (WTO)?."
Long-term process
Although agricultural trade liberalization is a long-term process, it depends on the political will of countries and on the ability to seek alternatives to impasses. All of the models presented during the seminar pointed to significant potential gains, chiefly in WTO multilateral negotiations, but also in the negotiations of the FTAA. These models show the importance of focusing discussion on sensitive products such as sugar, regarding which there are longstanding disputes.
It is important, for example, to separate questions of market access, which can be treated more adequately in a regional forum, from systemic questions, such as agricultural subsidies and rules pertaining to anti-dumping and intellectual property. Systemic questions would be more appropriately handled through the Doha Development Agenda of the World Trade Organization in Geneva. Nevertheless, it is essential that the two types of negotiation yield satisfactory results reducing both subsidies and agricultural protectionism.
Agriculture and Latin America
The final round of FTAA negotiations begins in November, following the seventh ministerial group meeting in Quito, Ecuador. Brazil and the United States will co-chair the negotiations, which should be concluded by January 2005. More than 400 meetings have taken place since the Miami Declaration in 1994, which gave rise to hemispheric trade liberalization negotiations.
Agriculture makes up about 10 percent of total regional trade, and is a strategic subject of FTAA negotiations. Initiatives such as this seminar, organized by the IDB Integration and Regional Programs Department, aim to inform the discussion by presenting pertinent analyses and current figures, such as the study quantifying all the different types of tariffs imposed by FTAA and EU countries, and the degree of protection they offered. The Bank will continue investing resources to improve databases and - through its technical assistance programs - to train negotiators in the agriculture field in Latin American and Caribbean countries.