Through trade negotiations at the multilateral and regional levels there have been important changes in the international trade legal framework and institutions. The full implementation of the 1994 Uruguay Round agreements of the World Trade Organization (WTO) is still in progress for many countries and multilateral negotiations are continuing in the Doha Development Round. With growth in high-value agricultural trade, consumer demand and regulations related to sanitary, phytosanitary and quality issues play an increasingly important role in determining agricultural trade opportunities. The dispute settlement process of the WTO now provides a forum for various trade conflicts to be resolved. There have also been advances in regional trade agreements (RTAs), across the Americas, Europe, Africa, and Asia/Pacific, such as the EU’s Economic Partnership Agreements (EPA). New preferences are also being refined for the least developed countries, such as through the African Growth Opportunity Act (AGOA). One consequence of these multilateral and regional developments is that trade rules and opportunities are changing rapidly with important implications for developing countries.
Given the predominant role of agriculture in the livelihoods of most people in developing countries, especially in Sub-Sahara Africa and South Asia, any strategy for slashing poverty and hunger must include rapid growth in the agricultural sector. However, increased agricultural productivity can depress commodity prices and incomes of farmers if they are not linked to market opportunities, or if there exist high transaction costs. Poorly functioning markets, weak domestic consumer demand, and lack of export possibilities are major constraints on agricultural growth prospects for many developing countries.
Thus, countries own unilateral trade and domestic policy decisions are also critical determinants of their agricultural development opportunities. Trade openness is a necessary but not sufficient condition for sustained growth in developing countries and global poverty alleviation. This research program undertakes significant work on domestic policies affecting markets, the development and strengthening of market-based policy instruments, and the design of efficient adjustment and safety net policies for those potentially adversely affected by trade and domestic policy reforms. The distributional consequences of trade liberalization are becoming increasingly important in less developed countries. A better understanding of this is critical for further development reforms in the domestic and global trading system.