Agricultural liberalization in multilateral and regional trade negotiations

For most Western Hemispheric (WH) countries, agriculture is a sensitive sector, absorbing a considerable portion of the economically active population and representing a high percentage of GDP and exports. Thus, agriculture is a strategic issue for all Latin American countries for both regional and multilateral trade negotiations. This paper provides an overview of the forces in favor of and against agricultural trade negotiations.Using various methods, the paper first attempts to measure the level of tariff protection for agricultural and non-agricultural products. It introduces new indicators to evaluate tariff protection in bilateral and regional integration agreements. It also presents an overview of domestic and export agricultural subsidies in the world.The main findings of the study are the following:tariffs are the most commonly used trade-distorting instruments in agricultureother protection mechanisms such as sanitary restrictions, domestic support and export subsidies may also distort trade but are difficult to evaluatein the majority of the WH countries, agricultural exports are highly concentrated in a small basket of specific productssubsidies could have potential spillovers on world prices and market-shares and are much better addressed through multilateral negotiationsmarket access issues, such as tariffs and some non-tariff barriers are better addressed in a bilateral or regional framework.Finally, the paper suggests some solutions for trade liberalisation in the WH. The main recommendations include:to implement zero tariffs for all products while using exceptions lists to detect potentially difficult sectors for future negotiationsto eliminate all trade and production distorting subsidies and to avoid any kind of exceptionsto enhance market access at the same time that subsidies are cut.