AGRICULTURE IN THE URUGUAY ROUND - AMBITIONS AND REALITIES

Agricultural trade policies are basically a function of domestic polic y considerations which have produced high levels of support in many co untries. New policy instruments such as direct payments, which are mor e demanding in terms of information costs ut which distort resource al location less, are becoming more attractive. Unilateral liberalisation is, however, unlikely. Freer trade is a public good which requires in ternational collective action to be provided. Countries which have a c lear-cut trade interest in liberalising markets for commodities they e xport can play the role of catalyst in international co-ordination. Th e existence of big players is a favourable factor. Hence, the drift of the Round towards a coordination of US-EC interests. Both political e conomy and trade interest considerations suggest that an agreement rea ched will have its main impact on crops which are widely traded. The m ain constraining factor of an agreement on EC and US agriculture will be the discipline it will impose on the use of export subsidies. Agric ulture will still not come fully under GATT rules which apply to other sectors, but in the future the CAP will be more constrained by intern ational commitments than in the past.