International Trade - Theory and Policy, 2010a

agriculture remains the most heavily protected industry around the world. In addition to high tariffs at
the borders, most countries offer subsidies to farmers and dairy producers, all of which affects world
prices and international trade. Developing countries believe that the low world prices for farm products
caused by subsidies in rich countries both prevents them from realizing their comparative advantages and
stymies economic development. However, convincing developed country farmers to give up long-standing
handouts from their governments has been a difficult to impossible endeavor.
To their credit, developed countries have suggested that they may be willing to accept greater reductions
in agricultural subsidies if developing countries would substantially reduce their very high tariff bindings
on imported goods and bind most or all of their imported products. Developing countries have argued,
however, that because this is the Doha “Development” Round, they shouldn’t be asked to make many
changes at all to their trade policies; rather, they argue that changes should be tilted toward greater
market access from developing into developed country markets.
Of course, this is not the only impasse in the discussions, as there are many other issues on the agenda.
Nevertheless, agricultural liberalization will surely remain one of the major stumbling blocks to continued
trade liberalization efforts. And the Doha Round is not dead yet, since continuing discussions behind the
spotlight reflect at least some sentiment around the world that further trade liberalization is a worthy
goal. But this is not a sentiment shared by all, and indeed opponents almost prevented this WTO round
from beginning in the first place. To understand why, we need to go back two years to the Doha Round
commencement in Seattle, Washington, in December 1999.
The WTO Seattle Ministerial—1999
Every two years, the WTO members agreed to hold a ministerial meeting bringing together, at minimum,
the trade ministers of the member countries to discuss WTO issues. In 1999, the ministerial was held in
Seattle, Washington, in the United States, and because it was over five years since the last round of trade
discussions had finished, many members thought it was time to begin a new round of trade talks. There is
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