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FINANCING NORMAL LEVELS OF COMMERCIAL IMPORTS OF BASIC FOODSTUFFS

Year of publication 2003

Pages 209

Author Trade and Markets Division

Product type Book (stand-alone)

Category Technical book

Edition 1

Synopsis (short abstract) International food trade is important for developing countries: while for many a relatively large share of exports consists of agricultural commodities, these countries are in fact principally net importers of basic food products, and spend a major part of their export revenue on such imports. For this reason, many developing countries are concerned about the risk of increasing world food prices, and about the risk of having to import more food on commercial terms if food aid was reduc ed. Both risks could happen as a result of the Uruguay Round, which, at some time in the future may lead to considerable declines in agricultural subsidies in developed countries; this, in turn, would normally lead to lower production (and therefore higher prices and potentially, less food aid) as well as to lower stocks (implying more volatile food prices). This issue figured prominently in the discussions on the Uruguay Agreement (which, among other things, led to the creation of t he World Trade Organization), and gave rise to the “Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries”, also known as the Marrakesh Decision (see Annex 1). This recognized these potentially negative effects and called for special facilities to address difficulties of financing imports of basic foodstuffs.

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