Trends in World Trade and Agricultural Trade

CONTENTS

1.1.  Recent trends in world trade

1.2.  Recent trends in agricultural trade

1.3.  Conclusions

 

KEY POINTS

* Trade mainly takes place between developed countries (negara maju), although developing countries (negara berkembang) increased their share of global trade in the 1970s and the 1990s. The share of least developed countries (negara tertinggal)  has fallen further in the past two decades.

* Agricultural trade, though increasing in absolute terms  and relative to agricultural production, is of declining importance in total trade.

* The role of transnational corporations  in trade has been growing, and they now account for an estimated of 40% of world trade.

* Prices of agricultural commodities have fallen, both in real terms and relative to the prices of manufactured goods. They are also highly volatile.

* The forthcoming WTO negotiations provide developing countries (negara berkembang) with an important opportunity to improve their market position, and to better capture the advantages of trade liberalization.

 

CONCLUSIONS

There has been a considerable increase in trade flows since the end of World War II. Today, around one-third ( 1/3 ) of world output is traded internationally. Technological breakthroughs in transportation and communication and international agreement leading to more liberal trade policies are some of the reasons behind this trend. Increased flows of commodities have been accompanied by the rapid growth of capital, and to a lesser extend, technology movements. Movement of labour have not followed the same trends, because because of increasing barriers to the free movement of workers.

Trade among developing countries (negara berkembang) remain rather small and represents only a minor share of total world trade although it has increased.

Although trade grew faster during the 1970’s and 1990’s in developing countries than in developed countries, the latter are responsible of the bulk of international exchange. Transnational corporations have been particularly active in world trade and their importance has grown. In 1998, they accounted for an estimated 40% of the exchanging taking place in the world.

Within this context of rapid growth of trade, agriculture has lagged behind ( telah tertinggal di belakang). Despite sustained growth of trade in agricultural commodities, the share of these commodities in world trade has been progressively reduced.  This evolution can be explained in part by the increasing proportion of products originating from agricultural that are being traded as processed food or manufactured products.  The fact that the Uruguay Round Agreement envisages lower tariff cuts in agriculture than in other sectors may reinforced this trend.

Developing countries produce a large proportion of the most actively traded agricultural commodities . For many developing countries, these commodities are the major source of foreign exchange.

Prices of agricultural commodities have dropped dramatically between 1980 and 1998, in contrast with the increase in the prices of manufactured goods. The term of trade between agricultural commodities and manufactured products fell by more than 50% over this period. This has also contributed to the relatively slower increase of trade in agricultural products compared to products produced by other sectors measured in value-terms. It has also meant that developing countries dependent on agricultural exports have had to increase their agricultural exports in order to buy the same amount of manufactured products.

Forthcoming negotiations under WTO ( World Trade Organization) are an important opportunity for developing countries to improve their market position in order to better capture the advantages of trade liberalization. For this, they will need to be well informed and well organized.

TEN LEADING EXPORTERS OF AGRICULTURAL PRODUCTS

( 1980, 1990, 1997 : WTO Annual Report 1998; International Trade Statistics )

01.  USA

02.  France

03.  Netherlands

04.  Canada

05.  Germany

06.  United Kingdom

07.  Australia

08.  Belgium-Luxemburg

09.  Brazil

10.  Italy

 

( Quoted from : Yon Fernandez de Larrinoa Arcal ; Materne Maetz ; Policy Assistance Division ; http://www.fao.org ).

 

 

 

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