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Liberalization of agricultural markets in rich countries is the linchpin for a successful conclusion to the Doha Round of World Trade Organization (WTO) negotiations. Rich countries highest barriers to trade are in agriculture, and an easing of these barriers is a major demand of developing countries.
Trade negotiations committed to promoting economic development and poverty reduction also cannot ignore agriculture when more than half the people in developing countries and 70 percent of the poor live in rural areas. Lack of market access is one key barrier under discussion in these negotiations.
But reductions in trade-distorting subsidies also are important for certain countries and commodities, notably poor cotton farmers in West Africa. Subsidy cuts are also politically necessary to achieve a balanced outcome in the negotiations.
In early October 2005, US Trade Representative Robert Portman and EU negotiators proposed differing approaches to addressing these problems. This brief describes how the WTO approaches agricultural trade barriers and domestic subsidies and evaluates the recent US and EU proposals. It then points the way towards a successful outcome for the Doha Round, an outcome that is far from certain given the offers currently on the table.