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4.1

Draft Paper – Not to be cited without author’s permission

The key issues in current trade negotiations

Market Access This is an issue for both Northern and Southern governments. As we saw in the historical review above, access to Southern country markets for U.S. and European Union (EU) exports was a key motivation first for SAPs and later for trade negotiations. On the other hand, the asymmetry by which Northern countries currently rely on a range of non-trade barriers (NTBs) to offer greater protection to their home markets than Southern countries are permitted for theirs, has turned market access to Northern markets, for Southern exports, into a central rallying cry of the current round of negotiations. This was one of the key points of consensus that united the so-called “G-20” which included a number of large Southern agroexport powers—like Brazil, China, South Africa and India—in their blocking of new agreements in Cancun. The endorsement of market access at a rhetorical level by the U.S.. and EU, combined with their unwillingness to offer hard concessions, was seen by G-20 negotiators, and the international media, as hypocritical, helping torpedo the meetings. On the other hand, it is important to understand that the G-20 and U.S./EU positions on market access are not so far

off in reality. Many liberalization paradigm, been forced to liberalize in their own right, they

of the agro-exporting G-20 nations accept the trade but feel it has be applied unfairly to date, as they have far more than Northern countries. As agroexport powers want the same opportunity to benefit from this pro-free

trade model as the U.S. and EU. Family hand, have a different position. Grouped

farm and peasant groups, on the other together in a global alliance called the

Via Campesina that pools both Northern and greater importance on farmer access to their vast majority of the world’s farm production

Southern farm groups, they place own domestic markets, where the goes, than on export markets, and

see

a

tradeoff

between

the

two.

Market

opening

helps

agoexporters

they

agree,

but point out that these are but a tiny minority of the world’s farmers. On other hand, market opening hurts the vast of majority of farmers who produce domestic markets, as they are now subject to competition from cheap imports.

the for

Domestic Subsidies Domestic subsidies are government payments and services to farmers and agribusinesses, and are sometimes confused with domestic supports, with is a broader category that also includes mechanisms to boost crop and livestock prices, like import tariffs and quotas, and price supports. In the dominant WTO paradigm, subsidies are divided into those that potentially distort trade by paying for producing products destined for export that might not otherwise be produced—like payments to farmers on a per bushel or head of livestock basis without any limit on quantity—, and subsidies that do not distort

trade. An example of the latter payments to take land out of

would be payments for soil conservation,

production.

The

conventional

wisdom

or on

subsidies—especially the former category—is unfairness in the global system of agricultural

that they are the principal source of trade. Richer countries can afford,

and in fact have, vastly greater their production is higher than

levels of it would

subsidies than poorer countries. be without these payments, and

Thus their

products

can

be

sold

in

world

markets

at

lower

prices,

because

the

payments

can

8

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