Keywords: adjustment costs, agriculture negotiations, FAO, Food and Agriculture Organisation, jointness, multifunctionality, non-commodity outputs, non-trade concerns, OECD, transaction costs, WTO, World Trade Organization, agricultural trade liberalisation, trade reform, multifunctional agriculture
A decade of debate over non-trade concerns and agricultural trade liberalisation: convergences, remaining conflicts and a way forward
The debate over non-trade concerns (NTC) and trade liberalisation for the past decade is reviewed and convergences and remaining conflicts are identified. It is found that, while the legitimacy of multifunctionality is no longer controversial and there is a convergence of the views on the best policy instrument for addressing NTC, divergent positions regarding the treatment of NTC in market access commitments still remain. It is concluded that the difference in views on the pace and sequence to arrive at targeted payment solution for non-trade objectives is a root cause. The article presents three justifications for gradual trade reform as a way to resolve the conflicts: the lack of information on the implications of trade liberalisation and the irreversible nature of non-commodity outputs, high initial transaction costs for designing targeted payments for non-commodity outputs, and the costs and time for shifting public funds to financing targeted green box payments.