The Evolution of the Treatment of Agriculture in Preferential Trade Agreements

Abstract

This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD countries. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Foreign direct investment and trade in agro-food global value chains

“…Often viewed as a vehicle for economic and political integration amongst members, these agreements have resulted in substantial improvements in market access, delivering reduced tariffs across a broad range of agricultural commodities. They typically include provisions relating to Sanitary and Phytosanitary Systems (SPS) and Technical Barriers to Trade (TBT), and increasingly encompass features relating to investment, competition and intellectual property (Thompson-Lipponen and Greenville, 2019). It is thus understandable that the respondents view trade agreements in such a favourable light, as the broad scope of these agreements can send a powerful signal to prospective investors.…”

“…Rules of origin can impose higher compliance costs on firms by requiring them to arrange their supply chains in a less efficient manner. In addition, insufficient harmonisation across trading countries of rules of origin applied to agriculture can undermine the benefits of liberalisation (Thompson-Lipponen and Greenville, 2019). Finally, import quotas and local content measures also create barriers for firms seeking to participate in international supply chains.…”