Globalization of World Food Markets

Several policies have contributed to a reduction in trade barriers between nations and to expansion of export and import opportunities for producers and consumers in agriculture and manufacturing:

  • Several rounds of General Agreement on Tariffs and Trade (GATT) negotiations led to a reduction in tariffs and a goal of a phaseout of subsidization and protection of many segments of agriculture.

  • Regional “free trade” blocs have been established throughout the world and are constantly expanding. The European Union is the most long-lasting and successful example. The North American Free Trade Agreement (NAFTA) established another major trade bloc which includes the United States, Mexico, and Canada and is expected to be expanded to include Chile and other Latin, Central, and South American countries as well.

  • The demise of communism in central and eastern Europe and the more open trade policies in China have substantially expanded the volume of trade among the previous communist world nations and the United States and other democracies.

  • Developing countries in South America, Asia, and Africa have gradually abandoned protectionist strategies. They now tend to reduce tariffs and enable expanded foreign trade and investment in their economies.

Globalization and reduction of trade barriers increase competitive pressures and provide extra incentives to reduce costs and increase yields. They increase the demand for more effective and efficient pest protection and pest-control products. They also increase competitiveness in pestcontrol markets and can lead to expansion of facilities and markets for suppliers of superior pest-control products.

Recent developments have reduced but not eliminated barriers to international trade. Countries and regions have a wide array of legislative tools (including environmental and agricultural policies) that discriminate against foreign suppliers. The volume of international trade in agriculture depends on the capacity to recognize and meet the needs of foreign markets and on the economic well-being of the buyers. US exports to Japan might be hampered by product quality and design limitations. The recent economic slowdown in Asian markets led to a slowdown in US food exports to some of these countries.

Countries are still able to maintain their own separate environmental-and health-protection regulations even in the era of freer trade. Thus, Canada and Japan have had stricter pesticide-residue regulations than



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