Developing Countries and Liberalization of Agricultural Trade

The agricultural sector is a clear example of discrimination in the multilateral system of rules established by the General Agreement on Tariffs and Trade. A significant difference with agriculture is the increasing use in the area of distorting practices through large export subsidies by the industrialized countries. The reversal of protectionist and trade distorting policies, especially in agriculture, is particular interest for developing countries and for the international community as a whole, and is essential in order to achieve a process of sustained growth. The isolation of markets resulting from the adoption of protective measures raises the domestic prices of agricultural products. At the international level, the decline in demand as a result of closing markets exacerbates the deterioration of the relative prices of agricultural products in comparison with those of manufactures. The high domestic prices paid to agricultural producers in the industrialized countries have generated surpluses which are channelled to the world market by means of subsidies.