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Debate: Liberalization of agri-food trade

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Is the liberalization of agri-food trade a solution to food crisis?

Background and context

Global food prices are skyrocketing due to climate change, emerging biofuel industry and other factors. Almost one billion people are food-insecure and this number is rising every day. The question is, whether the liberalization of agri-food trade - the removal of subsidies, quotas and tariffs - can be seen as a solution to the current food crisis.

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Is the liberalization going to benefit the "poorest of the poor"?

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Pro

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Con

  • Trade liberalization damages the growth of poor countries. "From free trade to free and fair trade" - "Fair competition means that free trade should not, as it does today, take place at the expense of workers and the environment. Unfettered free trade leads to business going where – other things being equal – wages are lowest, obligations to workers (worker safety, social insurance) least, and environmental regulations most lax. Consequently, in the competition to attract investment there is constant pressure on countries to relax both social and environmental regulations. Especially in poor countries this leads to the unfettered exploitation of workers and abuse of the environment."


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Is the liberalization going to help the developing countries to exploit their comparative advantages?

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Pro

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Con

  • Developing countries will not be able to exploit their comparative advantages, because if we fully liberalize trade with agri-food products, middle-income countries are going to take advantage of such action as they are always a step ahead of the LDCs (least developed countries). Before the LDCs are capable of growing particular crops they can produce the best, there will be another players springing up - more efficient, more developed. That is because the LDCs always face the competition on the field of agriculture of the middle-income countries, as they already have fertilizers and machinery necessary to advance. Therefore, the desired goal (to help the poorest of the poor) is not achieved.
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Is the liberalization going to tackle the price volatility?

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Con

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Impact on the market: Would the liberalization positively affect the market?

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Pro

  • Scrapping trade distortions is desirable. Quotas, tariffs, and other trade barriers disrupt international trade and the market as they can contribute to market failure, therefore their scrapping is desirable.
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Con

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Vs protectionism: Is liberalization preferable to protectionism?

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Con

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See also

External links and resources

Books

  • Paul Roberts, The End of Food
  • Erik S. Reinert, Why Rich Countries Are Rich

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