Developing countries that stand back from full participation in trade reforms in the current round of trade negotiations are only short-changing themselves and other developing countries. That was the message I offered to a ‘round table’ between the National Farmers’ Federation and Oxfam Australia in Canberra last week. I’ve included my notes and presentation below
Among the many paradoxes of trade negotiations is the critical importance of agricultural trade to the overall success of the round when the sector accounts for a declining portion of world trade (now only 9 percent of all merchandise trade)—including of developing country trade, where it now accounts for less than 20%, on average, of export earnings. Of course, it also accounts for more than half of employment in many of the poorest developing countries.
Another paradox: developing countries, as a group, secured an up-front concession on the final deal in the current round of negotiations, excusing them from full participation in farm trade reforms. Yet two thirds of the developing countries’ potential gains from all trade reforms are likely to come from the agriculture sector—not textiles, which accounts for a little more than a quarter of their potential gains—and more than half of those gains as the result of reforms in other developing countries. This is in part because the intra-developoing country trade in agriculture has grown from just over thirty percent of agricultural exports to more than 40 percent of agricultural exports in the decade of the 1990s (se the WTO World Trade Report, 2004 p 16).
In other words, ‘special and differential treatment’ as it’s currently construed will shortchange the poor. The data shows that high-income countries will retain two thirds of the gains from any reforms in which they participate; so a smaller contribution by developing countries will almost guarantee a poor result for the low-income countries.