The purpose of this study is to assess the potential effects of liberalizing agricultural trade. The authors have used a simulation model of world markets in seven commodity groups (wheat, coarse grains, rice, ruminant meat, non-ruminant meat, dairy products and sugar) to make their assessment.

Developing countries as a group stand to gain very substantially from trade reform in agricultural commodities. Agricultural Trade Liberalization and the Least Developed Countries is the first book to address important questions relating to this subject. The authors are world renowned experts on international trade and development and they address a very important and timely issue.

Global trade liberalization-- reducing both negative and positive protection in line with the Dunkel proposal-- would gain developing countries an estimated $60 billion a year.

Agriculture seems to be a difficult sector to manage for most governments. Developing countries face tough dilemmas in deciding on appropriate price poli eies to stimulate food production and maintain stable, preferably low, prices for poor consumers. Governments in developed countries face similar difficult deci sions. They are called upon to give income guarantees to farmers whose incomes are unstable and relatively low when compared to those in the nonagricultural sector. These guarantees often lead to ever-increasing budgetary outlays and unwanted agricultural surpluses. High prices make new investments and the application of new technologies more attractive than world prices warrant, and a process is set in motion where technological innovation attains amomenturn of its own, in turn requiring price policies that maintain their rates of return. Surpluses are disposed of with subsidies in domestic markets or in the international market. Price competition reduces the market share of other exporters, who may be efficient producers, unless they are willing to engage in subsidy competition. This lowers export earnings and farm incomes or depletes the public resources of developing countries that export competing products. Retaliatory measures have led to frictions and further distortions of world prices. Every so orten the major agricultural exporters - the USA, the EC, Aus tralia, or Canada - accuse one another of unfair intervention. Though they have agreed to discuss agricultural trade liberalization under GATT negotiations, if anything, the expenditure on farm support has continued to increase in both the EC and the USA.

Global Agricultural Trade and Developing Countries presents research findings based on a series of commodity studies of significant economic importance to developing countries. The book sets the stage with background chapters and investigations of cross-cutting issues. It then describes trade and domestic policy regimes affecting agricultural and food markets, and assesses the resulting patterns of production and trade. The book continues with an analysis of product standards and costs of compliance and their effects on agricultural and food trade. The book also investigates the impact of preferences given to selected countries and their effectiveness, then reviews the evidence on the attempts to decouple agricultural support from agricultural output. The last background chapter explores the robustness of the global gains of multilateral agricultural and food trade liberalization. Given this context, the book presents detailed commodity studies for coffee, cotton, dairy, fruits and vegetables, groundnuts, rice, seafood products, sugar, and wheat. These markets feature distorted policy regimes among industrial or middle-income countries. The studies analyze current policy regimes in key producing and consuming countries, document the magnitude of these distortions and estimate the distributional impacts - winners and losers - of trade and domestic policy reforms. By bringing the key issues and findings together in one place, Global Agricultural Trade and Developing Countries aids policy makers and researchers, both in their approach to global negotiations and in evaluating their domestic policies on agriculture. The book also complements the recently published Agriculture and the WTO, which focuses primarily on the agricultural issues within the context of the WTO negotiations.

This study reviews policy developments in recent years and, in the light of that, explores ways in which further consensus might be reached among WTO members to reduce farm trade distortions – and thereby also progress the multilateral trade reform agenda. Particular attention is given to ways that would boost well-being in developing countries, especially for those food-insecure households still suffering from poverty and hunger.