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Agricultural Export Subsidies and Developing Countries' Interests

image of Agricultural Export Subsidies and Developing Countries' Interests

A new impetus has been given to faltering WTO trade discussions by the recent EU mandate supporting the liberalisation of agricultural trade policies and removal of export subsidies on agricultural products, within an environment in which all countries start reforming their trade policies. Until now, discussions have centred on agriculture in general, rather than at specific commodity level. This paper rises to the challenge laid down by the EU in identifying the specific commodities for which developing countries would gain benefit in any subsequent reforms. Agricultural Export Subsidies and Developing Countries’ Interests outlines the nature of export subsidies. It discusses the effect of reform on developing countries, indicating the scale of any changes. The policy implications of removing agricultural support in the EU are given and the consequences for net food exporting and importing countries examined. Finally, the paper considers the impact of EU agricultural policy reform on other policies, such as the Protocols of the Lomé Convention.

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Policy Implications of Export Subsidy Reform

In general, the previous chapter draws a picture where most countries experience a mixture of effects: actual or potential increases in export growth (in volume and value) in some product areas and higher border prices for some imported food products. Although the balance of effects is likely to vary across countries, the issues are common to all developing countries: how to increase the opportunities for export growth and diversification; and how to respond to the effects on consumers, government revenue and poverty of paying higher prices for imported food. The poor, however, would not only be affected by higher food prices as consumers.

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