WTO: Impact on Pakistan’s agriculture

The Uruguay Round Agreement on Agriculture (URAOA), 1986-94, was the first step towards inclusion of the agriculture sector within the global trade rules of the GATT. Given the fact that the Agreement on Agriculture (AoA) has a direct bearing on the member countries of the World Trade Organisation (WTO), this study explores the impact of the agriculture sector liberalisation in Pakistan by comparing it with the situation beforehand.The paper argues that in view of the current global trade regime, Pakistan, has gone too far in liberalising its agriculture sector, something which can have implications for its agriculture, trade, as well as domestic producers and consumers of agriculture products. Therefore, it is suggested that some degree of protection is justified to remain competitive and retain its domestic capacity to respond to world demand for its agriculture exports – a critical factor in achieving any gains from trade liberalisation, as well as to maintain consumer food security. While these objectives can be pursued within the WTO limits by using options available in the WTO Agreements, these will surely be subject to financial constrains.The paper outlines Pakistan’s negotiating position and strategy for the Doha Round of WTO talks, as well as the positions of other negotiating groups and parties. In light of the Final Framework Package (July 2004) negotiated by the participants, the argument is made that although the Doha Round was far more successful from the perspective of developing countries, it is far too early to qualitatively and quantitatively assess the gains made from this round.Based on the terms agreed to through the negotiations, the following policy suggestions are offered by the author:opting for tariffs increase (within ceiling bindings) as a measure for producers’ protection may not be feasible as it may increase the cost of imports for food consumerscontinuing with the existing floor price policy to stabilise prices for producers in the post-harvest season is recommendedan increase in support to various agricultural expenditures is recommended (and permissible within the Agreement on Agriculture), particularly in areas such as investment subsidies, agricultural input subsidies for low-income or resource poor producers, as well as support to producers to encourage diversification from the growing of illicit narcotic cropsstate agencies (such as the Trading Corporation of Pakistan and Pakistan Storage and Stabilisation Corporation for Wheat) should continue their presently limited role in trade and advisory bodies to the private sectorin line with special provisions, Pakistan can subsidise food prices on a regular basis with the objective of ‘meeting food requirements of urban and rural poor at reasonable prices’The paper concludes by noting that a comprehensive and integrated set of strategies is necessary for Pakistan to prepare its agriculture sector to face the new challenges in global markets and in WTO negotiations, if it is to promote and protect its interests.