Reform achievements so far, and GATT/WTO contributions

• Published in: Finishing Global Farm Trade Reform pp. 32 - 42
• Main Author: Anderson, Kym
• Format: Book Chapter
• Language: English
• Published: University of Adelaide Press 01.01.2017
• Subjects: Agrarian reform; Agricultural economics; Agricultural land use; Agricultural policy; Agricultural sciences; Agriculture; Agronomy; Biological sciences; Business; Business operations; Commerce; Countries; Crops; Developing countries; Economic disciplines; Economics; Export subsidies; Exports; Farm economics; Farm exports; Governance; Government; Government services; Human geography; Imports; Industrial agriculture; Political geography; Political science; Public assistance; Public assistance programs; Social sciences; Tariffs; Taxation; Taxes; Trade
• ISBN: 9781925261349; 1925261344

Notwithstanding the virtues of trade openness summarized in the previous chapter, throughout history most countries have intervened at their border with measures that distort the country's trade and drive a wedge between domestic and international market prices. An exceptional period was the mid-nineteenth century, which saw repeal of Britain's Corn Laws and the 1860 trade agreement between Britain and France. Those milestone events triggered a gradual opening up of world trade, and contributed to rapid growth in advanced economies. That first globalization wave was brought to an abrupt halt by the First World War and then the protectionism of the 1930s. When followed by the Second World War, leaders of key trading economies felt driven to establish a set of rules to govern international trade. The resulting General Agreement on Tariffs and Trade (GATT) came into force in 1948.The GATT also provided for Contracting Parties to conduct multilateral rounds of negotiations to gradually lower simultaneously their barriers to trade. Those rounds resulted in major reductions between the late 1940s and early 1980s in manufacturing protectionism in developed countries. However, they were unable to stop – let alone reverse –growth in agricultural protectionism in those countries over that period. Those policies inevitably depressed international prices of farm products, and ultimately led to surpluses in Western Europe. When export subsidies were provided to help dispose of them, an export subsidy war erupted across the north Atlantic. That drove international prices of farm products to a record low in the mid-1980s, just as the next (seventh) GATT Round of negotiations were to be launched in Uruguay. It also triggered the formation of the so-called Cairns Group of agricultural-exporting countries, whose sole aim was to keep agriculture on the top of the Uruguay Round's agenda. As a result, an agreement on agriculture was among those that came into force along with the World Trade Organization (WTO) on 1 January 1995. Those commitments were implemented over the following decade.