7 April 2000

Trade liberalisation vital

MORE trade liberalisation is essential if developing countries are to have any chance of improving their economic situation, Miguel Rodriguez Mendoza of the World Trade Organisation told the conference.

Farming contributes 28% to gross domestic product in low income nations, compared with 2% in western economies. "For these countries, economic development depends critically on how they do in agriculture."

But they were unable to compete with the Treasuries of developed countries, he said. The tomato paste industry of Senegal and Ghana, for example, had been wiped out by imports backed with over $200m of export subsidies.

The last GATT round went some way to opening markets and so improving living standards. Developing countries share of world agricultural trade had increased from 41% to 43% between 1990 and 1998. "But more needs to be done to allow them to fully exploit their competitiveness in a vital sector of their economies."

Reducing trade distorting subsidies would also encourage food production to take place where it was most efficient to do so. This was essential if the world was to feed another 1.45bn people by 2020. &#42