1 Conflict and convergence in agricultural trade negotiations

A new agreement on agriculture in now being negotiated in the WTO and is a key for a successful completion of the Doha Round. Trading with agriculture goods is of great importance to African countries where these products quite often account for more than 50 per cent of all exports. Since African’s poorest people depend disproportionately high on food products, on the income side as well as on the expenditure side, negotiations on agriculture are strongly related to poverty and development. Hence, negotiations on agriculture have the highest priority for African negotiators. Analysis of the various proposals using the UNCTAD/FAO Agricultural Trade Policy Simulation Model (ATPSM) shows that most of the benefits from liberalisation accrue to developed countries, which currently have the highest levels of intervention. The group of developing countries, which include both exporters and imports of agricultural products, gain from liberalisation, but those gains are small and unevenly distributed. In fact, net-food importing developing countries and many African countries tend to lose in terms of welfare because of higher world prices. Within developing countries, producers tend to gain from higher world prices at the expense of consumers. Whether the elimination of export subsidies is favourable for African countries depends on the specific product and whether a development policy should more support consumers or producers. Providing compensation to current beneficiaries of European Union support in ACP countries for the erosion of preferences would be helpful for many African countries. JEL classification: F13, Q17 Key words: agriculture, trade, modelling, negotiations The opinions expressed in this paper are those of the authors and do not necessarily reflect the views of UNCTAD or its members. The designations and terminology employed are also those of the authors. The contribution of funding from United Kingdom DFID to further develop ATPSM is gratefully acknowledged