Carolyn Tanner

Farm Policy and Trade Conflict: The Uruguay Round and CAP Reform

The book is a detailed chronology of the treatment of agriculture within the GATT and the evolution of agricultural policy in the European Union. It describes in detail the seven years of Uruguay Round negotiations and the somewhat related efforts to reform the CAP. The strength of the book is the institutional detail about how agricultural policy is made within the European Union. European agricultural interests have captured agricultural policy just as they have in the United States and all the OECD countries. However, adding the European Union-level bureaucracy to the producer-national government relationship complicates the lobbying process. Readers interested in the role of the European Commission and the European Council in the policy process can find it here. The main conclusion of the book is that only modest liberalization of agricultural trade has been accomplished by the Uruguay Round and its implementation. However, the authors claim that the principle of subjecting agriculture to the same GATT and World Trade Organization rules as other sectors is an important accomplishment. Export subsidies have been restricted and import quotas have been converted to tariff equivalent. Although some of the tariff equivalents are more than 100%, they may be more vulnerable to future liberalization than they were as quantitative restrictions. Although the subject of agricultural trade policy lends itself to economic analysis, the weakness of the book is that it is short on economic analysis. There is a large empirical literature on the effects of barriers to international agricultural trade and the trade-diverting effects of the CAP, but this literature is rarely mentioned. Past EU enlargement has provided empirical data on the effects of expanding from six to nine to twelve to fifteen members, but the book is silent on these effects. The authors do claim, without detailed analysis, that future EU enlargement to include the transition economics of Central and Eastern Europe would make the CAP no longer viable at current support and tax levels. The book cites D. Gale Johnsons 1973 book World Agriculture in Disarray (1991) and uses that title as the title of Chapter two. It would have been appropriate to also cite Johnsons 1950 book on the incompatibility of domestic price controls and free trade. This conflict explains why the agricultural sector has been most resistant to trade liberalization. Readers of a book on agricultural trade might expect a comparison between the variable levies and export subsidies on grain of the European Union and the British Corn Laws with their tariffs and export countries. The comparison is not made in the book. In the Uruguay Round negotiations on agriculture, a distinction was made between government payments related to current production (such as price supports) and payments unrelated to current production (so-called decoupled payments). The former payments were restricted by

The Formulation of Price Expectations: An Empirical Test of Theoretical Models

Price expectations are an important part of many models of economic behavior. In spite of this, little is known of the process by which decision makers formulate their expectations when making actual decisions (for two studies on the subject, see Turnovsky, and Heady and Kaldor). The aim of this study is to test various hypotheses about the formulation of price expectations, using data obtained from individual decision makers.

Principles of Australian Quarantine

This article provides an overview of the report on Australia’s quarantine policies and procedures, Australian Quarantine. The Report proposes fundamental changes to Australia’s approach to quarantine and recommends: the development of a partnership between industry, governments and the general public; the establishment of a statutory authority to develop Australia’s quarantine policy and to ensure national delivery of quarantine services; acknowledgment of the importance of maintaining Australia’s unique natural environment; the need to redress the imbalance between the plant and animal sectors; development of a more formally structured process for conducting risk analyses; and expanding the scope of quarantine beyond the ‘barrier’ to cover pre‐border, border and post‐border activities.

Agricultural Trade Liberalisation and the Uruguay Round

With the Punta del Este Declaration, agriculture was accorded prominence in the GATT negotiations and, for the first time, national support policies were on the agenda. In this paper, the progress of the negotiations on agriculture is reviewed in an attempt to understand the factors which shaped the final outcome and to assess the likely impact of the round on liberalising agricultural trade. Although the immediate impact is likely to be modest, the round will provide longer term benefits to agricultural trade through the extension of the GATT rules-based system to agriculture. The framework which has been laid should provide a sound basis for future negotiations. Within the multilateral framework, the pace of change is a function of the willingness of all parties to compromise and this is evident in the Uruguay Rounds outcome which reflects the European Unions agricultural reform agenda.

Australian quarantine post the Nairn Review

The Commonwealth government has accepted the basic tenets of the report of the Australian Quarantine Review (the ‘Nairn Review’), except for the recommendations to establish a statutory authority. Australia will maintain its existing high standards of quarantine and enhance activities such as community awareness, manageable risk (based on science), protection of Australia’s unique environment, external input to policy formulation, and recognition of the continuum of quarantine (pre‐border, border and post‐border). Greater emphasis will be given to improved consultation in risk analysis, increased monitoring for pests and diseases, and enhanced national preparedness and response capacity (especially for plants and aquatic animals).

Prospects for reform of the Common Agricultural Policy

Abstract Burgeoning stocks and increasing budgetary pressure are leading to mounting criticism of the CAP. Recent experience suggests that these internal pressures are unlikely to precipitate fundamental reform in the short to medium term because of the opportunity to defer expenditure and to transfer costs to the national governments. It is argued that rather than seeking a market-oriented solution, the Community appears set on continuing to make ad hoc policy adjustments aimed at minimizing expenditure and overcoming problems arising in particular sectors.