# **I. Introduction**

The last few decades have been a period of very rapid export growth from developing countries, aided by the growth of the world economy, lowering of trade barriers, and increasing supply capabilities in developing countries. Increased import and export shares in total output have been a key source of growth in many developing countries. This growth has been fastest in manufacturing, where global levels of protection have been reduced significantly.<sup>2</sup> Growth has been slower in agriculture, where significant protection still remains.

Aksoy (2004), in a summary paper on trade flows, concluded that while there has been tremendous change in the past 20 years in global specialization and trade in manufacturing, there has been relatively little structural change in global agricultural trade flows. His data started in 1980 and ended in 2001. Since then, world trade has expanded at a faster rate, and the period around the year 2001 was a period of declining agricultural prices. For most agricultural commodities, 2002 is the bottom of the price cycle. The late 2000s, on the other hand, have seen very different developments. Towards the end of this period there was a major agricultural price spike, shortage of commodities, and reevaluation of the basic hypotheses about agricultural surpluses (World Bank, 2008). New developments such as such using grains for bio-fuels, export controls, and greater demand by China and other developing countries for meats, grains etc, have led to agricultural, and especially food prices increasing very rapidly.

While the 1990s were a period of rapid trade reform in developing countries and of implementation of Uruguay Round commitments, the Uruguay Round seems not to have yielded any meaningful reduction in agricultural protection in industrial countries. Protection in OECD countries increased during the 1960s and 1970s, reaching its peak in the late 1980s. There is little evidence that protection decreased significantly in the 1990s (Nogues 2002; Ingco 1997). The 2000s are somewhat better because support to agricultural has declined during the late 2000s, caused mainly by the price increases for agricultural commodities.<sup>3</sup> In most of the middle income developing countries, support for agriculture has increased during the last decade. In addition, there are new sets of information on the level of protection in developing countries that indicate an increase in support to agriculture by many developing countries (Kym Anderson et al, 2009). Furthermore, these price increases have led to developments where many countries have placed export restrictions on food products distorting the agricultural trade policies even further.

This paper examines the growth and structure of agricultural trade between 1990 and 2007. Data include 2007 but miss the agricultural price peak in 2008. Even with this limitation, we think that even this shorter period is instructive to observe the changes that have taken place. In this updating, the focus is again on the agricultural performance of industrial and developing countries and of specific commodity groups.

> 2 Annex shows the changes in trade shares and gives and example where trade growth depends more on changes in markets shares than demand growth.

> 3 In most countries, support to agriculture is given on the basis of price levels. This is done either by setting the supports on nominal levels, or setting fixed nominal value tariffs. If prices go down, then the support levels increase. When prices go up, as was the case in late 2000s, support levels decrease. In addition to this cyclical adjustment, many countries also lower their trade barriers when food prices go up (WB 2008).

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