Negotiating a Preferential Trading Agreement

Negotiating a Preferential Trading Agreement

Issues, Constraints and Practical Options

Edited by Sisira Jayasuria, Donald MacLaren and Gary Magee

Presenting a blend of economics and law, this book provides unique insights as well as practical guidance for negotiators considering major issues on the agendas of bilateral and regional preferential trading agreements (PTAs).

Chapter 5: Agriculture

Donald MacLaren

Subjects: asian studies, asian urban and regional studies, business and management, international business, economics and finance, international business, international economics

Extract

Donald MacLaren An FTA has the potential to place Australian farmers ahead of their competitors in the Chinese market.1 INTRODUCTION The liberalization of international trade in agricultural products has proved to be difficult to achieve in bilateral, regional and multilateral trade negotiations. These difficulties stem from the role of agriculture in the economy, from the political economy of the agricultural sector and from the belief in some societies that agriculture is in some way ‘special’. It is well known that the relative position of agriculture in the economy declines with economic growth and yet the sector seems able to maintain a substantial political influence despite its declining relative economic importance.2 It is also well known that agriculture remained largely outside the trade rules of the General Agreement on Tariffs and Trade 1947 (GATT), that the sector has its own Agreement in the World Trade Organization (WTO) and that specific commodities are frequently excluded from bilateral trade agreements in possible violation of Article XXIV of GATT 1994 or, if included, the transition periods are well in excess of the 10-year period allowed in the Understanding.3 In some developed economies, support by farmers for government intervention in their own sector is reinforced by society’s apparent belief in the agrarian myth.4 This belief provides part of the underpinning for the so-called multifunctionality of agriculture.5 In developing countries and especially in the least-developed countries, a large part of economic activity is generated by the poor in rural communities and the dynamics that play out...

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