Liberalization of the Agricultural Sector in Northeast Asia: The Effects of the Doha Development Agenda

Abstract

Despite its importance, the Doha Development Agenda (DDA) has not been successful so far. Although negotiations about agricultural-sector trade liberalization have been built into the agenda of the DDA, the views of countries within the Cairns group are not easily reconciled with those of non–Cairns group countries. This paper examines the quantitative effects of liberalization of the agricultural sector in Northeast Asia based on the proposal of Stuart Harbinson, chairman of WTO's agriculture negotiating committee. The simulations undertaken here suggest that welfare gains from partial agricultural liberalization would be relatively modest in China (US$59 million), South Korea (US$687 million), and Japan (US$2.4 billion). However, the welfare distribution would be very uneven in South Korea and Japan. Most of the welfare losses would originate from impacts on rice farmers in these two countries, and losses would be politically difficult to accept. If rice were to be treated as a strategic product, the uneven welfare distribution would be considerably mitigated.