Impact of trade liberalization on agriculture in the near East and North Africa

Nicholas Minot, Mohamed Abdelbasset Chemingui, Marcelle Thomas, Reno Dewina, David Orden

The impact of trade liberalization on developing countries has been a topic of some interest and controversy for many years, but the debate became prominent during the Doha Round of multilateral trade negotiations. The suspension of the Doha Round will likely shift attention toward regional and bilateral agreements and toward unilateral reforms, but the topic remains relevant to international organizations and decision makers in developing countries. Because trade liberalization is expected to increase the world prices of agricultural commodities, concern about the possible negative impact of trade liberalization has focused on net-food-importing regions, including the Near East and North Africa (NENA). The recent food price increases in 2006 and 2007 have added to the relevance of the issue for these countries.

Given the importance of the topic, it is surprising that relatively few studies have examined the impact of trade liberalization on small farmers and other poor households in the NENA region. With support from the International Fund for Agricultural Development (IFAD), this study attempts to fill this gap. It combines a comprehensive review of the literature on trade liberalization in the NENA region with four country case studies that examine the distributional impact in more depth. In addition to examining the likely impact of various types of trade liberalization on farmers and the poor in the region, this study identifies a number of policies and programs that would enhance the positive effects of these reforms and alleviate the negative effects. This report is one of a series of studies carried out by the International Food Policy Research Institute (IFPRI) on the impact of trade agreements and trade policy on the poor in developing countries. Recent research on this theme includes studies of the impact of alternative Doha outcomes, the effect of global cotton markets on poverty in Pakistan, the impact of rice policy on poverty in the Philippines, and a review of trade-related agricultural policies in four developing countries. These studies aim to provide policymakers with objective, empirically-based analyses that will contribute to informed, pro-poor decisions in the area of trade policy.