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Forging a Deal on Agricultural Trade Reform

June 1, 2004

Patrick A. Messerlin

Abstract: The Doha Round focus on agriculture is often misunderstood in OECD countries because this sector represents barely 2-4 percent of OECD GDP and employment, and because the history of the OECD countries underlines the importance of manufacturing and services as engines of long-term growth. But agriculture represents 40 percent of GDP, 35 percent of exports, and 50-70 percent of total employment in the poorest developing countries—12, 15 and 15-40 percent, respectively, in the other developing countries. Three-quarter of the world’s poorest people live in rural areas, the proportion in the poorest countries being as high as 90 percent (on average less than 20 percent in OECD countries). In sum, agriculture is an urgent and vital problem for developing countries, and even more so for the poorest countries. It is not solely a problem for major farm exporting countries such as Argentina, Brazil or Thailand. It also affects the poorest developing countries which are often dependent on a very small set of commodities, many of them highly subsidized and protected by OECD countries, such as sugar, cotton, or rice. Absent protection in the North, greater diversification in the South would be feasible.

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