Agricultural Trade and the GATT

Abstract

Agricultural trade has been a problem area in international commerce for several decades. Pervasive government intervention into the agricultural sector in many countries has distorted the location of world production and the extent and patterns of trade flows. Such intervention has restricted the gains from trade that accrue to world consumers arising from differences in the costs of production of farm commodities between countries. Furthermore, agricultural trade has not been effectively governed by the institutional framework for international trade relations that has been provided by the General Agreement on Tariffs and Trade, the GATT, since its inception in 1947. Rather, international trade rules have been adapted to conform with domestic agricultural programmes. Agriculture has been treated in a different way from other industries within the GATT and has not been subject to many of the disciplines which are intended to frame an orderly trading system¹.