Global Agricultural Trade in the New Century Moving Forward or Retreating?

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International trade in food and agricultural products is vital and will become even more so in the new century. It is especially vital for those countries that depend on imports to feed their population, among them a number of developing countries, where demand for agricultural imports is projected to grow dramatically in the new century as growth of domestic food consumption outstrips their production potential. Agricultural trade is economically vital for farmers in exporting countries who look for international markets to sell their produce in order to make a reliable livelihood. Many developing countries belong to that category of agricultural export nations. Less obvious, agricultural trade is also economically vital for countries that could, in principle, produce most of the food and raw material they need, but do better by concentrating on other sectors where they have a comparative advantage, while importing products at prices below the costs if they were to produce them domestically.

While almost everyone agrees that agricultural trade is vital, the world at the dawn of the new century is still full of barriers to this trade. Indeed, contrary to enormous progress in recent decades in liberalizing manufactures trade, agricultural trade is still significantly distorted through government policies. Many countries maintain high-tariff walls in …