Agricultural Trade Liberalization and Human Rights: Economic Analysis for Poverty Reduction in LDCs-A Survey
Matsumura, Atsuko, Forum on Public Policy: A Journal of the Oxford Round Table
People in the least developed countries have the right to a higher standard of living in exchange for their labor. However, there are many obstacles to alleviating poverty. Trade theory has shown that international trade can expand aggregate income in every country joining in trade. This is so called the gains from trade. For this reason, international trade can be seen as the engine for the development and a useful tool to reduce poverty throughout the world. Unfortunately these goals have been hard to reach due to various trade impediments.
Least developed countries (LDCs), according to the United Nations Committee for Development Policy, exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. A country is classified as a Least Developed Country if it meets criteria based on (1) low-income (three-year average GNI per capita of less than US $750, which must exceed $900 to leave the list) (2) human resource weakness (based on indicators of nutrition, health, education and adult literacy) (3) economic vulnerability (based on instability of agricultural production, instability of exports of goods and services, economic importance of non-traditional activities, merchandise export concentration, and handicap of economic smallness, and the percentage of population displaced by natural disasters) (4) population of less than 75 million. The classification currently (as of April 16, 2008) applies to 49 countries. (1)
The current round of WTO, called Doha Development Round, takes its name from the aims expressed in the Declaration announced in Doha on November 14, 2001, for entering into trade liberalization negotiations with the goal of promoting development and reducing poverty in developing nations. The underlying principle of the Doha Round is to promote development in poor countries. Presently, the number of total WTO members is 153, of which the number of developing countries members (including LDCs) is about 100, and of which the number of LDC members are 30. If we clarify WTO members by regions, 41 members are African, 32 members are in Central and South America, and 21 members are Asian developing countries. (2) The increase in members belonging to developing countries and LDCs has led to an increase in the new negotiation power for development and poverty reduction.
US Trade Representative Robert Zoellick's statement after the WTO Doha Ministerial Conference in 2001 expresses the hope for a successful round of negotiations in the following way:
'Doha lays the groundwork for a trade liberalization agenda that will be a starting point for greater development, growth, opportunity and openness around the world... we've settled on a program that lays out ambitious objectives for future negotiations on the liberalization of the agriculture market. These objectives represent a cornerstone of more market access priorities for trade and they will create a framework that will help the United States and others to advance a fundamental agricultural reform agenda. On a range of issues, such as agricultural liberalization and reduction of tariffs on non- agricultural goods, we've shown how our interests can converge with the developing world.' (3)
Despite hopes for success at the beginning of the talks, Doha achieved little progress on most of the development issues up to the WTO Ministerial Meeting which took place in Cancun in September 2003. One of the key disappointments was agricultural reform, which many developing countries and NGOs had viewed as the primary objective of the round. The March 2003 deadline for agreement on agricultural modalities was not achieved. In the joint paper presented by US and EU on agricultural issues in August 2003, the framework was widely criticized by developing countries. On domestic support, no specific figures were given for reducing the most trade-distorting support. …