[Publisher:] Institut für Weltwirtschaft (IfW) [Place:] Kiel [Year:] 1990
Kiel Working Paper 454
Apart from demand and supply conditions, todays EC trade in agricultural products is determined not only by classical trade policy instruments, e.g. customs or quotas, but in addition by numerous internal instruments influencing consumption, production and storage. The protective character originates from specific sectoral policy goals having a long tradition in most of the six founding members of the EC. With the first and second enlargement of the EC the protective effects on third countries (trade diversion) aggravated not only because of the geographical extension, but because more and more products had been included in the protective system, respectively protection rates for some products had been increased due to demands of new member countries. During this process conflicts in objectives between internal producer demands and that of trade partners, being not members of the EC, became apparent. They were tackled in different ways, depending on the commodities and countries involved. Trade relations with developed countries, competing on markets for basic food commodities, e.g. grains, sugar, beef and milk products became increasingly impaired and the first serious attempt for a general reduction of trade barriers is only now undertaken in the GATT-Uruguay Round. Trade policy towards DCs was characterized by more cooperative approaches. The reasons are twofold. First, and most importantly, agricultural commodities produced in DCs are substitutes to EC-produced goods only to a small extent, either in production or in consumption. Secondly, there are some political commitments towards DCs in general or with respect to specific country groups such as the former colonies of France and the UK (now ACP-countries) or the mediterranean countries, where in the latter case geopolitical objectives are on the background of trade concessions.