In the last round of multilateral trade negotiations (the Uruguay Round - 1986 to 1993) disagreement over the treatment of agriculture delayed the conclusion of the talks by several years. Today, the current round of WTO negotiations (the Doha Round) is more than six years late in producing intended results - again, largely because of serious disagreement among WTO Members over how to proceed with agricultural reform and liberalisation. The world clearly needs a more efficient and effective approach to dealing with this important sector of the global economy.
The primary focus of this project was to test the viability - from a political economy standpoint - of what is called the 'critical mass' approach to trade negotiations addressing agriculture. Under the critical mass approach, only those countries that account for the most significant trade shares of covered products participate in the negotiation and implementation of a deal. For example, a negotiation addressed to trade in wheat, soybeans, maize and barley would need just 53 of WTO's 153 Members to cover more than 90 percent of global trade in these products. The benefit of the critical mass approach is that small countries with a small interest in trade need not be involved so that the negotiation is less complicated and can therefore be concluded more rapidly with fewer concessions to special sensitivities.
In the first phase of the project - which benefited from the ACIAR funding - the research team developed some options for a critical mass approach whose viability was tested by research collaborators in India, China, Brazil and Indonesia with industry groups, government officials and commentators in those economies. The findings of these contributors and the broad hypothesis of the principal researchers were then submitted to examination at a conference of experts held in Adelaide in late 2008. In broad terms, while most of those involved in the project think it would not be possible to introduce critical mass into the Doha Round at this late stage, there is considerable support for experimenting with the critical mass approach for agriculture negotiations in the future.
In the second phase of the project - ongoing with financial support from RIRDC - the team is conducting a statistical and economic modelling exercise that will help us to understand the impacts of different options for a critical mass agreement on different economies, regions and country income groups. The team also plans to compare the critical mass approach with the current approach in the Doha Round (if it is ever un-blocked). The results of this modelling of critical mass 'packages' will be further tested in exchanges with experts and government negotiators later in 2009.
The project's capacity to prove the 'workability' of the critical mass approach for agriculture could have an important positive impact on the way in which future negotiations are conducted. More rapid and effective negotiations to liberalise and reform agricultural trade will produce important welfare gains for farmers and consumers in both agricultural exporting countries and in countries that depend on imports to satisfy their food needs.