The Common Agricultural Policy and the Doha development round. EUMA Paper Vol. 8 No. 1, January 2011

Mahajan., Menaka (2011) The Common Agricultural Policy and the Doha development round. EUMA Paper Vol. 8 No. 1, January 2011. [Policy Paper]

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Abstract

Agriculture represents an important yet contentious issue in global trade. Trade in agricultural and agro-industrial products in 2002 made up $583 billion, or 9.3 percent of worldwide trade in goods.1 However, this sector has historically been characterized by strong protectionism that has been difficult to uproot. Agricultural policy is a highly political issue that involves the national interest of food security, consumer interests in terms of food costs, and perhaps most importantly, domestic and international redistribution of wealth. Farm support in the European Union has generally been high relative to other countries, a fact that is criticized by trading partners, as well as the nature of support measures used.2 Liberalization of trade is thought to benefit everyone by allowing countries to specialize in the production of those goods in which they have comparative advantage. However, given the national security aspects of food policy, states have been reluctant to completely liberalize their agricultural markets, fearing eventual reliance on food imports. In recent decades, developing countries with a comparative advantage in agriculture have commanded increased international attention. In the Uruguay Round of World Trade Organization (WTO) negotiations, developing countries formed a coalition to assert their interests. From that point forward, multilateral trade negotiations (MTNs) have necessarily included at least some input from developing countries. The current round of negotiations, the Doha Round, has been stalled for almost a decade as developing countries push the European Union and United States to remove domestic protection measures. The most important issue holding up successful conclusion to the Doha Round is agriculture, “a make-or-break issue of the Doha Round of MTNs.”3 On one side are the pro-liberalization developing and developed countries demanding access to agricultural markets and on the other, the European Union, which has stubbornly resisted meaningful reductions of domestic supports institutionalized in its Common Agricultural Policy (CAP).4

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