WTO: Farming Exporters Tell Rich Nations to Open Agriculture Markets Developing countries and food exporters from rich and poor nations on Sunday demanded that the United States and European Union...

WTO: Farming Exporters Tell Rich Nations to Open Agriculture Markets


Developing countries and food exporters from rich and poor nations on Sunday demanded that the United States and European Union open their farm markets and eliminate trade-distorting subsidies. ... “Those members responsible for the most significant distortions in global agricultural trade—the EU, U.S. and Japan—bear a heavy responsibility,” the Cairns Group of agricultural exporters, which includes Canada, New Zealand, Argentina, South Africa and Thailand, said in a statement. “We can and must now seize this opportunity to secure the main parameters of the Doha round. The costs of failure are too high.”... Zoellick, as former U.S. trade representative, ... said an open and fair trading system would give farmers in developing countries a reason to expand production. Consumers would benefit from lower prices and governments could save on the costs of subsidies and improve their budgets.

a. Explain why farmers in developing countries would expand production if EU, U.S., and Japanese subsidies were eliminated.

b. Explain why EU, U.S., and Japanese consumers would benefit from lower prices that the removal of subsidies would bring.

c. What are the costs of failure of the Doha Round? Who loses and who gains?