Influence of Trade Regimes and Agreements on AKST | 63

Key Messages

1. While greater openness to international trade in the region has been associated with higher rates of growth of per capita income (and a reduction of in­equality between developing Asia and the developed countries), there has also been an increase in income inequality within the Asian countries. With the stress on trade, investment in agriculture and rural development has been neglected. Conversion of agricultural land to industrial or urban use has resulted in the displacement of many rural inhabitants (with indigenous or tribal peoples, small farm­ers and the landless disproportionately represented) who are not the beneficiaries of the resulting industrial or other non-agricultural employment, increasing the rural-urban disparity. Development policies could be more balanced by increased investment to agriculture and rural development and more emphasis on non-tradable sectors.

2. Greater equity (through, for example, land rights for women) and a reduction of social exclusion can also increase productivity and therefore provide gains from international trade. In many countries, women have been drawn in large numbers into export-led manufacturing, with resulting improvement in incomes, but there are also problems of wage differentials, short-term industrial work­ing life, occupational hazards and health risks. Trade policy can be made more inclusive to take into account the specific needs of marginalized segments of the community such as women, indigenous peoples and local small producers, as well as to recognize them as holders of AKST.

3.   There  are vulnerabilities  in   international  trade caused by rising energy costs, volatility of internation­al markets and overdependence on imports for food and agricultural technology. The implications include worsening terms of trade, endangering of food security and changes in the nature and location of AKST generation and dissemination in the region. Alternative and domestic markets are also options for better and sustainable devel­opment, as these are the more easily attainable and locally relevant ways of dealing with issues of sustainability and food security. Comprehensive safety net measures and social welfare systems could help to protect well-being in a situa­tion of growing risk and uncertainty. While South Asia, in particular, has yet to work out ways to effectively deal with the opening up of agricultural markets and reducing subsi­dies of various types, this is less of a problem in East and Southeast Asia, where there has been more stress on achiev­ing transitions to more productive methods of cultivation and higher value crops. Measures to increase productivity are superior to providing subsidies, which distort factor use and can be a fiscal burden.

4. OECD agricultural subsidies do not allow Asian small-scale producers to compete in external markets or domestic markets without tariff support and have detrimental impacts on their livelihoods and food se­curity. Furthermore, many of the developing countries in Asia, in particular the least developed countries, have lim­ited fiscal capacity and are unable to provide the support

 

allowed under WTO regulations. Along with eliminating agricultural subsidies in the OECD countries, there may be a case for providing support to producers in least developed countries. In addition, countries could consider the need for safeguard measures based on food security, livelihoods and rural development criteria. National trade policies could also balance the interest of net food buyers with the require­ment for rural development. Overall, there is scope to pro­mote increases in productivity, through enhanced provision of public goods, such as infrastructure, research, irrigation, etc., to enable agricultural producers to be competitive.

5. Anti-dumping measures have been used by devel­oped countries to protect domestic producers against competition from developing country exports. Compe­tition considerations in anti-dumping law and practice could be introduced, as well as restricting the use of anti-dumping measures only to situations where there is an evidence of predatory intent.

6. The secular decline and wide fluctuations in prices of primary commodities have severe negative impacts on the livelihoods of millions of small producers. Price stabilization measures can be combined with orderly chang­es in these prices, along with promotion of alternate uses of commodities and movements up the value chain.

7. Least developed countries, including the small Pa­cific islands, are unable to match the competitiveness of larger and more complex economies. Special, dif­ferential market access, for given time periods, both within ESAP and with industrialized countries, can help LDCs benefit from international trade. OECD countries, such as Japan and South Korea, face challenges in reducing protec­tion of their agriculture. It needs to be considered whether agricultural subsidies are better used in promoting environ­mental improvements and enabling transitions to alternate livelihoods.  Major  agricultural exporters  (Australia  and New Zealand) face the challenge of integrating environ­mental concerns into price competitive agricultural systems. This involves developing new technologies (such as feeds that reduce methane emissions) and methods of pricing, in taking account of what are now externalities.

8. With developing Asia's characteristic of labor abun­dance relative to land and capital, there is a compara­tive advantage in crops, such as vegetables, fruits and flowers, which use more labor per unit of land and capital, as against, e.g., cereals. In order to utilize this comparative advantage both AKST and extension would require more attention to high value crops, such as fruits, vegetables, flowers.

9. Vertical integration/coordination of food systems has marginalized primary producers and the domi­nance of retail chains may further this trend. This does not mean that there can be no countervailing power, e.g., of organized primary producers, that would improve the share of primary producers. The most important requirements of small farmers in this changing environment are better access to knowledge, technology and capital, along with facilita-