19th March 2008
Fostering Pro-sustainable Development Agriculture Trade Reform :Strategic Options Facing Developing Countries
This note begins from the premise that growth in agricultural production1 offers far greater prospects for broad-based economic growth and poverty reduction than alternative (non farm)opportunities in many poor countries. However, what is less well appreciated is that the source of agricultural growth, and the mechanisms by which this growth is transmitted to broader economic growth, will differ across countries at different stages of development and that these differences need to be factored in when configuring present and future options for trade policy.
Inadequate consideration of the different types of agricultural-led growth options is particularly problematic given the context of current trade negotiations which acknowledge that Special and Differential Treatment (SDT) for developing countries should be integral to negotiations in country’s new commitments and in any relevant new or revised rules and disciplines. Whilst there are strong arguments for allowing flexibility on some aspects of these rules for some developing countries, a broad-brush approach to defining SDT which tries to provide sufficient flexibility to all countries in all aspects will not be looked on favourably by negotiating partners. Developing countries will have to pay a negotiating price for any SDT they wish to include in trade rules, so they need to be sure that such SDT is both necessary and effective in meeting their development needs. On the other hand, SDT that is too specific will undoubtedly leave some countries exposed. This paper attempts to inform current debates on reforms to trade rules and exemptions by discussing why and under what circumstances they might be needed to achieve pro-poor outcomes in developing country agriculture.
In the following section, we first briefly review the contemporary obstacles and opportunities to agricultural development, many of which differ from those facing countries that have successfully developed in the past. We then develop an argument for differentiating opportunities for agriculture-led growth and the vastly different sets of policy instruments that might be appropriate to countries adopting these approaches at different stages of development. In section3, we look first at export-led growth which often calls for an offensive policy stance to be taken in trade negotiations/debates and then at import substitution as an approach that may require a more defensive stance. Section 4 makes some brief observations regarding the potential environmental implications of these different strategies.