Abstract

Why is there a chapter on agriculture in a book on international trade, while there are none on automobiles, electronic equipment or any other sector producing specific goods? Is trade in agricultural products such an important part of world trade? Certainly not. In 2008, agricultural products accounted for no more than 8.5 per cent of world merchandise trade (WTO 2010), and that share is on a secular declining trend. It is the potential of agriculture to cause trouble in trading relations among otherwise friendly nations that tends to place agriculture high on the trade agenda. That trouble does not derive from any inherent characteristics of agricultural products – they are neither explosive nor toxic, and most of them are easily tradable. The trouble that agriculture tends to cause in international trading relations originates from the fact that many governments interfere heavily with markets for agricultural products and by doing so distort trade and international competition. Of course, agriculture is not the only sector where governments pursue policies that distort trade and create problems for other nations. However, the degree to which policies interfere with markets and trade is particularly pronounced in agriculture. What is more, there is a tendency for many governments to consider their agricultural policies a matter of national sovereignty which cannot easily be subjected to international disciplines. As a result, international trade negotiations, as pursued multilaterally in the World Trade Organization (WTO) or bilaterally, typically face particularly difficult issues when it comes to negotiating the treatment of agriculture.