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The system of rules that governs world trade has developed since World War II through a series of major international negotiating “rounds.” Because rich-country players call most of the shots in this intensely political process, some goods that poor countries are best at producing—including crops—still face high barriers in rich countries. Yet when rich countries tax food imports and subsidize their own farmers’ production, they cause overproduction and dumping on world markets, which lowers prices and hurts poor-country farmers. Industrial tariffs also tend to be anti-poor, with low rates for raw commodities and high rates for labor-intensive, processed goods. And, CDI countries spend almost exactly as much subsidizing their own farmers as they do on aid: some $100 billion per year. Because the ability to sell in rich-country markets is crucial for developing countries, the CDI trade component ranks countries according to how open they are to developing-country imports.

New Zealand does best on trade in the 2011 Index, with Australia, the United States, and Canada not far behind. In general, EU nations share common trade and agriculture policies and therefore score essentially the same on trade. Japan’s rice tariffs have shrunk in recent years relative to the rising world price of rice, but are still high at 538 percent (equivalent to a 538 percent sales or value-added tax on imports). Overall, however, Norway ranks last in trade, due largely to high tariffs on meat, dairy products, sugar, and wheat from poor countries.

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