The system of rules that shape world trade has developed since World War II through a series of major international negotiating “rounds.” Because rich countries call most of the shots in this intensely political process, some goods that poor countries are best at producing—including crops—still face high trade barriers in rich countries. When rich countries tax food imports and subsidize their own farmers’ production, they cause overproduction and dumping on world markets, which lowers world prices and hurts poor-country farmers. Industrial tariffs also tend to hurt the poor, with low rates for raw commodities and high rates for labor-intensive, processed goods. Because the ability to sell in rich-country markets is crucial for developing countries, the CDI trade component ranks wealthy countries according to how open they are to imports from developing countries. It also tracks the degree to which countries have streamlined their importation processes to reduce delays and red tape and whether or not they have legal restrictions on purchasing services from foreigners.
On the opposite end is the Czech Republic which requires the most documents and time (along with Australia, Hungary, and Slovakia). Although Japan and South Korea limit subsidies to their farmers, they maintain the highest tariff rates on rice, and Korea imposes by far the highest tariffs on grains, seeds, and nuts. These trade barriers are the reason that that these two countries finish last on trade, followed closely by Norway and Switzerland, which have high tariffs on meat, dairy products, and grains.
For more on trade, explore the trade topic, related publications, and experts.