Small island developing states and agricultural trade liberalisation

Abstract

The WTO negotiations on agriculture, in particular on market access, have revealed a division among developing

countries. While substantial reductions in tariffs on a Most- Favoured-Nation basis could increase the market share for

agricultural exporting developing countries, it could well be as a result of trade diversion from other developing country suppliers whose preferential access to the market is eroded. This chapter provides a quantitative assessment ofthe impact of "small-islandness" on the agricultural trading environment of SIDS, and identifies the types of rules or "modalities" that might be desirable from their own trade and development perspective. The chapter argues that SIDS are likely to be made worse off following multilateral liberalisation because of loss of quota rents and rising prices of imports. However, one compensatory measure, that of enhanced market access specifically granted to SIDS, could substantially offset their welfare losses.