Agriculture and the WTO
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Agriculture and the WTO

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Developing countries have a major stake in the outcome of trade negotiations conducted under the auspices of the World Trade Organization (WTO). 'Agriculture and the WTO: Creating a Trading System for Development' explores the key issues and options in agricultural trade liberalization from the perspective of these developing countries. Leading experts in trade and agriculture from both developed and developing countries provide key research findings and policy analyses on a range of issues that includes market access, domestic support, export competition, quota administration methods, food security, biotechnology, intellectual property rights, and agricultural trade under the Uruguay Round Agreement on Agriculture.
Material is covered in summary and in comprehensive detail with supporting data, a substantial bibliography, and listings of online resources. This book will be of interest to policymakers and analysts in the fields of development economics and commodities pricing and trade.

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Published 17 March 2004
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EAN13 9780821383681
Language English
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Agriculture and the WTO
TRADE AND DEVELOPMENT SERIES Agriculture
eveloping countries have a major stake in the outcome of trade
negotiations conducted under the auspices of the World Trade ANDDOrganization (WTO). Agriculture and the WTO: Creating a Trading
System for Development explores the key issues and options in agricultural THEWTOtrade liberalization from the perspective of these developing countries.
Leading experts in trade and agriculture from both developed and
developing countries provide key research findings and policy analyses CREATING A TRADING SYSTEM FOR DEVELOPMENT
on a range of issues that includes market access, domestic support, export
competition, quota administration methods, food security, biotechnology,
intellectual property rights, and agricultural trade under the Uruguay
Editors
Round Agreement on Agriculture.
Merlinda D. Ingco and John D. Nash
Material is covered in summary and in comprehensive detail with supporting
data, a substantial bibliography, and listings of online resources. This book will
be of interest to policymakers and analysts in the fields of development
economics and commodities pricing and trade.
THE WORLD BANK
ISBN 0-8213-5485-XAgriculture
and the WTO
Creating a Trading System
for DevelopmentAgriculture
and the WTO
Creating a
Trading System
for Development
Merlinda D. Ingco and John D. Nash
Editors
A copublication of the World Bank and Oxford University Press© 2004 The International Bank for Reconstruction and Development / The World Bank
1818 H Street, NW
Washington, DC 20433
Telephone 202-473-1000
Internet www.worldbank.org
E-mail feedback@w
All rights reserved.
123407060504
The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily
reflect the views of the Board of Executive Directors of the World Bank or the governments they represent.
The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors,
denominations, and other information shown on any map in this work do not imply any judgment on the part of
the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.
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The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without
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Photo credits: Ship/Grain image—© Paul A. Souders/Corbis; Tomator/conveyor belt image—Willard R.
Culver/NATIONAL GEOGRAPHIC IMAGE COLLECTION/Getty Images.
ISBN 0-8213-5485-X
Library of Congress Cataloging-in-Publication data has been applied for.Contents
List of Boxes vii
List of Tables viii
List of Figures xi
Foreword xiii
Acronyms and Abbreviations xv
1. WHAT’S AT STAKE? DEVELOPING-COUNTRY INTERESTS IN THE
DOHA DEVELOPMENT ROUND 1
Merlinda D. Ingco and John D. Nash
2. TRADE AGREEMENTS: ACHIEVEMENTS AND ISSUES AHEAD 23
Merlinda D. Ingco and John Croome
3. EXPORT COMPETITION POLICIES 43
Harry de Gorter, Lilian Ruiz, and Merlinda D. Ingco
4. MARKET ACCESS: ECONOMICS AND THE EFFECTS OF POLICY INSTRUMENTS 63
Harry de Gorter, Merlinda D. Ingco, and Laura Ignacio
5. QUOTA ADMINISTRATION METHODS: ECONOMICS AND EFFECTS WITH
TRADE LIBERALIZATION 95
Harry de Gorter and Jana Hranaiova
6. DOMESTIC SUPPORT: ECONOMICS AND POLICY INSTRUMENTS 119
Harry de Gorter, Merlinda D. Ingco, and Laura Ignacio
7. THE DISTRIBUTIONAL EFFECTS OF AGRICULTURAL POLICY REFORMS 149
Harry de Gorter, Merlinda D. Ingco, and Cameron Short
8. THE “MULTIFUNCTIONALITY” OF AGRICULTURE AND ITS IMPLICATIONS
FOR POLICY 167
David Vanzetti and Els Wynen
9. FOOD SECURITY AND AGRICULTURAL TRADE POLICY REFORM 179
Merlinda D. Ingco, Donald Mitchell, and John D. Nash
10. MANAGING POTENTIAL ADVERSE IMPACTS OF AGRICULTURAL TRADE
LIBERALIZATION 193
William Foster and Alberto Valdés
vvi Agriculture and the WTO
11. THE SANITARY AND PHYTOSANITARY AGREEMENT, FOOD SAFETY POLICIES,
AND PRODUCT ATTRIBUTES 215
Simonetta Zarrilli with Irene Musselli
12. AGRICULTURAL BIOTECHNOLOGY: A PRIMER FOR POLICYMAKERS 235
Donald J. MacKenzie and Morven A. McLean
13. GLOBAL INTELLECTUAL PROPERTY RIGHTS: A NEW FACTOR IN FARMING 253
Geoff Tansey
14. RULES AND OPTIONS FOR SPECIAL AND DIFFERENTIAL TREATMENT 269
Constantine Michalopoulos
15. SPECIAL TRADE ARRANGEMENTS TO IMPROVE MARKET ACCESS 291
Helen Freeman
APPENDIX A: OECD POLICY EVALUATION MATRIX AND TRENDS IN POLICY
FOR VARIOUS COMMODITIES 317
Cameron Short and Harry de Gorter
APPENDIX B: THE AGREEMENT ON AGRICULTURE 349
INDEX 367list of boxes
Box 1.1 The Importance of Agriculture to Developing Countries 3
Box 1.2 The Human Face of Policy Incoherence 9
Box 1.3 Reforming Inefficient Support Systems: Recent Experience in Two Developing
Countries 19
Box 1.4 Cambodia Rice: Challenges to Integration 20
Box 2.1 The Price of Multilateral Negotiations 24
Box 2.2 Uruguay Round Agreement on Agriculture: Important Documents 27
Box 3.1 Two Examples of Consumer-Only-Financed Export Subsidy Schemes 56
Box 4.1 Transparency and Tariffication 70
Box 4.2 More on Tariff Quotas 80
Box 5.1 Tariff Quotas: Categories of Principal Administration Methods 99
Box 5.2 Tariff Categories of Additional Conditions 100
Box 5.3 Tariff Quotas: Economics of First-Come, First-Served (FCFS) 114
Box 5.4 Tariff Factors Affecting the Impacts on Trade with an STE in Importing
Country 115
Box 6.1 The Peace Clause and Domestic Subsidies 131
Box 8.1 Aspects of Valuation 172
Box 9.1 Food Security Indicators 182
Box 10.1 Farming without Subsidies: The Experience of New Zealand 206
Box 11.1 The Joint FAO/WHO Codex Alimentarius Commission (CAC) 218
Box 11.2 The Office International des Epizooties (OIE) 219
Box 11.3 The International Plant Protection Convention (IPPC) 220
Box 12.1 The Global Trade Effects of China Bt Cotton 238
Box 13.1 The U.K. Commission on Intellectual Property Rights’ Recommendations
on Agriculture and Genetic Resources 267
Box 15.1 Trade Agreements: AFTA to SADC 293
Box 15.2 A Brief History of the GSP Schemes 294
Box 15.3 The U.S. Generalized System of Preferences (GSP) and Argentina’s Economic
Crisis, 2001–02 298
Box 15.4 U.S. Generalized System of Preferences (GSP): Criteria and Conditions 299
Box 15.5 U.S. Generalized System of Preferenc Annual Timetable 300
Box 15.6 Parties to Regional Trade or Preferential EU Trade Agreements in Force as
of April 2002 303
Box 15.7 The Americas: Trade Diversion—Displacement from Markets 311
Box 15.8 Chile: Strategy for Growth—Access or Diversion? 312
viilist of Tables
Table 1.1 Rural-Urban Poverty Gap 4
Table 1.2 Agricultural Protection in Developing Countries, 1984–87 and 1994–98 11
Table 1.3 Applied Tariff Rates in Developing and Industrial Countries, 1994–98 (Percent) 12
Table 1.4 World Trade Simulation Model Product Categories 14
Table 1.5 Frequency of NTBs in Developing and Industrial Countries, 1994–98 (Percent) 15
Table 1.6 Export Growth Rates (Constant 1995 US$) 16
Table 1.7 Shares of Developing and Industrialized Countries in World Exports (Percent) 16
Table 1.8 Gains from Removing All Trade Barriers in Agriculture and Food Globally,
Post-Uruguay Round, 2005 (in 1997 US$ Billions) 17
Table 3.1 Percentage of Total Export Volume Receiving Export Subsidies 44
Table 3.2 Total Export Subsidy Commitments 44
Table 3.3 Percentage Use of Value Commitments by Country 46
Table 3.4 Percentage Allocation of Total Value Commitments by Commodity 47
Table 3.5 Percentage Use of the Total Value Commitments Allocated
to Each Commodity Group 48
Table 3.6 Percentage Use of the Total Volume Commitments Allocated
to Each Commodity Group 49
Table 3.7 Countries Using over 90 Percent of Value Commitments 50
Table 3.8 Countries Using overcent of Volume Commitments 51
Table 3.9 Value Front-Loading 52
Table 3.10 Volume Fr 52
Table 3.11 Export Subsidy Equivalents (ESEs) (Percent) 54
Table 4.1 Empirical Estimates of Transfers Due to Policies in World Agriculture,
US$ Millions (1999–2001 average) 72
Table 4.2 Empirical Estimates of Tro Policies by Commodity
in World Agriculture, US$ Millions (1999–2001 average) 73
Table 4.3 Examples of Tariff Peaks and Dispersion in Agriculture 75
Table 4.4 Tariff Escalation (Weighted Average MFN Applied Tariffs in Percentage)
in the Quad Markets (U.S., EU, Japan, and Canada) 77
Table 4.5 Special Safeguards Tabled in the URAA 78
Table 4.6 Analyzing Tariff Equivalents Using the Swiss Formula (maximum tariff of 25%) 84
Table 4.7 World Production and Value of Production and Tariff-Quota-Related Protection
for Grains and Oilseeds in the Six Regions of the PEM Model 88
Table 4.8 Import Quotas in PEM 88
Table 4.9 Tariffs Applicable to Tariff Quota Commodities 89
Table 4.10 Tariff Rates (US$/mt) 90
Table 4.11 Impact of Tariff Quota Border Protection (US$/mt) 91
Table 5.1 Tariff Quotas by Product Category 97
Table 5.2 Number of Tariff Quotas by Member Country 98
Table 5.3 Tariff Quotas by Principal Administration Method, 1995–2001 98
Table 5.4 Tariff Quotas: Simple Average Fill Rates, 1995–2001 107
Table 5.5 Distribution of Fill Rates, 1995–2000 108
viii