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Additional info for Agricultural Trade Policies in the Andean Group: Issues and Options (World Bank Technical Paper)

Example text

MERCOSUR includes trade in agricultural products under the requirement of free trade among its members, as does the Andean Pact and CARICOM. Regional trade in agricultural goods is responding to the more liberal trade conditions. At the multilateral level the Uruguay Round Agreement on Agriculture has instituted a radical change in the rules governing the allowable instruments of trade policy in agriculture, replacing non-tariff import barriers with tariffs, categorizing domestic subsidies into those that are acceptable and those that are objectionable, and banning new export subsidies.

27 Peru does not apply the Andean Pact AEC on third country imports. Agricultural Trade Issues Agriculture was fully included in the economic and trade policy reforms of Peru. Most barriers to agricultural trade were removed, and subsidies were eliminated. Import quotas, import licensing and state trading monopolies have been replaced by tariffs between 15 and 25 percent, with the higher rates applying to the more processed goods. A substantial expansion of imports has followed from these policy changes, and exports, in particular in the area of non-traditional agricultural exports such as asparagus, have also responded.

The exchange rate was liberalized in 1985, and a sharp devaluation followed. In 1987 a crawling peg system was introduced and the currency has 3 Information on Bolivian agriculture and agricultural policy is from Nina M. , September 1994, as well as from various FAO and World Bank sources. 4 The trade policy of Bolivia is described and discussed in Sarath Rajapatirana, "Bolivia: Trade Policies and Integration Choices", Latin American and Caribbean Department, World Bank, (unpublished). Page 4 been kept at a competitive level since that time, exhibiting a steady depreciation over the period.

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