In the decades-old debate over the global role of the World Trade Organization, agriculture is a constant point of reference -- particularly for those who question the organization's ability to make progress in leveling the playing field. Developing countries, many of them reliant on agriculture, have long wanted rich countries to stop subsidizing their farmers' production and lower tariffs. In exchange, wealthy countries are arguing against a proposal for a safety-net tariff mechanisms for developing countries; when prices fall or when imports rise too high, poor countries could charge substantially more at the ports to make sure local producers are protected. For more than three decades, during seven rounds of multilateral talks that finished with the Tokyo round in 1979, attempts to reach a deal on agricultural trade liberalization failed. The Uruguay round of discussions, concluded in 1994, at last brought agriculture under the purview of the organization. But it's widely agreed that Uruguay did little to open agricultural markets.
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In the ongoing Doha Development Agenda round of talks, agriculture has again taken center stage. Initiated in 2001, the negotiations had stalled by December 2008 as members became deadlocked, once again, over farming sector subsidies, tariffs, and other protections. WTO member countries have vowed to rev up talks in an effort to conclude the round in 2011, but so far this year there seems to have been little concrete progress. After 10 years of Doha negotiations, there is increasing concern that if the talks are not completed this year, then the round may be abandoned. And developing countries reliant on agriculture may well begin to question the value of their membership in the organization. Indeed, given the lack of progress on agricultural-sector liberalization through the WTO negotiations, one might reasonably wonder whether the WTO is an effective body to facilitate agricultural trade.
We recently decided to test this notion, to find out what benefits the WTO actually offers to agricultural countries. Surprisingly, despite all the rancor and roadblocks on reforming agricultural trade, we found that WTO membership still yields big rewards. Importantly, this is true for both developed and developing countries' agricultural markets.
Our research provides some intriguing answers about how WTO membership affects market access for developing countries. Our data set covered over 200 countries and territories, two sectors (agriculture and manufacturing), reflected 25 years of international trade flows, and controlled for a host of economic, political, and geographical factors known to either promote or impede trade. We found that participation in the WTO and its predecessor, GATT, increased members' agricultural trade by a remarkable 68 percent on average. In 2004 alone, this translated into an increase of $167 billion worth of additional agricultural imports, compared to a world without the WTO.
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