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Majority of countries have economically important and large sectors of agriculture which are often protected fiercely internationally. However, in the European Union, agriculture contributes a small percentage of the total value of income. This figure stands at 1.7 percent.
The figure is even lower in the United States, standing at around one percent. Despite its marginal value in these two industrial giants, agriculture is heavily protected and subsidized. Even though the United States has vowed to remove all trade barriers, this has been subject to political pressure from various groups such as the cotton farmers who plays significant political role with regard to voting patterns.
In contrast to these Northern countries, the developing countries depend on agriculture as the major source of sustenance. As a result, they pushed hard to ensure that their interests are recognized in the Doha Development Round. They also held that they are entitled to ‘special and differential treatment’ in order to strengthen their retarded trading positions.
There is also the group referred to as advanced developing countries that possess large and efficient systems of agriculture.
Among the members of this category is Brazil, which, with other countries of the same category pushed for more liberalization so that they may make of their competitive advantages.
The Agricultural negotiations in the Doha Development round can be fragmented into four major themes. These included export competition, market access, development issues and domestic supports. Export competition included export subsidies and food aid issues like disposing of Northern agricultural surpluses in poor countries.
Market access on the other hand included import tariff reductions, rules for sensitive and special products and a safeguard mechanism that protects the poor countries from major dips in world prices and surges in imports which are likely to threaten food security.
Development issues were those that recognized the reduced agricultural capability of poor countries hence the need for flexibility and SDT. Domestic support was largely concerned with subsidy payment to farmers. This had been classified by the World Trade Organization into categories representing different levels of trade distorting financial supports.
European Agricultural Policies and the Collapse of the Doha Rounds
The major obstacle to the progress of the Doha talks was the European Union’s Common Agricultural Policies. The primary focus of the policy when it was established over forty years ago was internal price support. This was meant to facilitate and promote within the member states food self-sufficiency. As such, the policy protects European Union farmers from external competition.
This is achieved through market access control and providing domestic support and export subsidies. The result is that European Union agricultural producers receive higher and stable prices above the international levels. With high prices, farmers increase production while on the other hand, consumption and imports are discouraged by high consumer prices.
The Common Agricultural Policy affects exporters and agricultural producers in other countries by lowering international prices for unprocessed agricultural products. The surplus goods are also sold very cheaply into specific markets which undercut local producers. These goods most probably find their way to the poor countries thereby making the local farmers to suffer.
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