1. Agricultural Policies and Opportunities for Developing Countries' Exports Stefan Tangermann Director for Food, Agriculture and Fisheries WTO Symposium on Trade and Sustainable Development Geneva, 10-11 October 2005

2. Outline • OECD area policies and market access • Dynamics of South-South trade • Relevance of non-tariff barriers

3. OECD area farm policies hurt competitive exporters • Farm support in OECD area remains high • … and largest (though somewhat declining) part is provided through price support, output subsidies • … which are rarely efficient in meeting domestic objectives in OECD countries • … but stimulate production, reduce imports and expand exports • … at expense of competitive low-support exporters

4. Farm support in OECD area remains high(US$ 280 billion in 2004) Korea Japan EU OECD USA Australia New Zealand Source: OECD

5. … and is mostly provided through price and output support Source: OECD

6. Market access is cornerstone • Price support can be maintained only behind border measures (export subsidies, tariffs) • Elimination of export subsidies, in all forms, already agreed in 2004 Framework • Tariff cuts are decisive, because they generate largest gains

7. The benefits of progressive tariff cuts • Tariff rates are widely dispersed • … with strong distortion effects • Tariff escalation does not help OECD farmers • … but harms developing countries • Exceptions for too many 'sensitive' and 'special' products can greatly reduce the gains from tariff cuts

8. Developing countries are increasingly heterogeneous in agricultural trade • In agriculture, developing countries overall are increasingly importers • But some developing countries are dynamic exporters • South-South trade in agriculture grows rapidly • Tariff cuts in developing countries are important for developing country exporters

9. Developing countries become ag. importers All dev'g countries, ag. products LDCs, ag. products LDCs, food excl. fish All dev'g countries, food excl. fish Source: FAOSTAT

10. South-South trade in agriculture grows fastAnnual growth rates of ag. exports, 1994-2004 Developing country exports to developedcountries developingcountries Developed country exports to developedcountries developingcountries Source: UN Comtrade

11. South-South trade will continue to grow 56 6.5 40 10 2.5 -3.4 -2.3 -38 -54 Numbers in bars denote 2014 net trade quantities in million tons Source: OECD

12. Non-tariff barriers become increasingly relevant • As tariffs are cut, NTBs become more important in relative terms • … but also in absolute terms, as consumers and industry focus on attributes of products and processes • Public and private standards are increasingly demanding

13. Private standards more demandingthan public standards? Private standardsare than publicstandards Source: OECD survey

14. Sustainable expansion of exports requires strong supply capacity • Ability to comply with public and private standards • Agricultural research, extension • Rural infrastructure • Transport infrastructure, ports, logistics • Customs administration • Attractive conditions for foreign investment

15. CONCLUSIONS • Tariff cuts are backbone of agric. liberalization ... and do not undermine effective domestic policies • Tariff cuts in developing countries become increasingly important ... as South-South trade expands rapidly • Strong supply capacity required ... to meet evolving consumer demands