New research finds two realistic proposals could make a big difference for poor countries
by Antoine Bouet, Senior Research Fellow, International Food Policy Research Institute
The collapse of the WTO talks represents a huge setback for developing countries. The agricultural trade policies of the industrialized countries harm the economies of many developing nations, where millions of poor people are dependent on agriculture for food and income. But too much is at stake, especially for the world's small-scale farmers, to play the "blame game" and point fingers. Instead, we need to look forward and identify the opportunities that lay ahead.
Reaching an agreement that helps developing country farmers may not be as difficult as it appears. While the most recent U.S. and E.U. proposals fell short of the deep cuts necessary to make a difference for poor people, two opportunities are currently lying on the table.
The International Food Policy Research Institute studied the various proposals, modeled the effect of a compromise agreement, and found that global income gains amount to US$55 billion. But this scenario did little for developing countries. We then modeled two additional changes.
First, if free access of least-developed countries to wealthy-country markets is increased from 97 percent of imports to 100 percent, as proposed by the E.U., world income would increase by an additional US$14 billion over the compromise scenario. Most important, about half of these additional gains would go to the poorest countries, increasing their income dramatically from US$1 billion to $7 billion.
Second, if the percentage of agricultural products defined as sensitive and special were reduced from five percent to one percent, as proposed by the U.S., world income would increase by an additional US$7.3 billion over the compromise scenario. This would especially benefit developing countries where agriculture is an important source of employment and export earnings-most notably in middle-income countries.
While the talks have collapsed for now, it is far from the end of the Doha Development round. The negotiations will continue, because ultimately reduction of agricultural protectionism and subsidies is in the interest of most countries, industrialized and developing alike.
As WTO member countries continue to work towards an agreement, we call on them to deliver on the Doha Development Pledge by granting poor countries full access to wealthy-country markets and enacting the lowest level possible for "sensitive and special" agricultural products.
Contrary to what some anti-globalization advocates contend, developing countries have much to gain from an agreement promoting more free and fair trade. While the complete removal of all industrialized country protectionism on agriculture would be ideal, these two practical proposals would make a big difference.
To read the study, please go to: http://www.ifpri.org/pubs/ib/rb06.asp
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For more information, contact:
- Michael Rubinstein, 202/862.5670
m.rubinstein@cgiar.org - Veronica O’Connor, 202/862.8177
v.oconnor@cgiar.org - Michele Pietrowski, 202/862.4630
m.pietrowski@cgiar.org