Impact of Agricultural Trade liberalization on Poverty in...

Impact of Agricultural Trade liberalization on Poverty in Latin America Historically the agricultural sector has been an important sector for the economies of Latin America because of this the issue of global agricultural trade liberalization has been a hotly contested issue. Some suggest it may harm Latin American countries and increase poverty by opening up the sector to foreign competition from more technological advanced nations. Others have argued that it will increase economic competitiveness and reduce poverty by promoting an increase in exports, job creation and by improving economic productivity in the sector. Research into this question suggests that global agricultural trade liberalization may reduce poverty overall in Latin†¦show more content†¦For example, many have observed that the decline of agricultural sector in the US signalled the rise an urban industrial society seen today. Furthermore, some studies estimate that the agricultural sector is 3.2 times better at reducing poverty when compared to other sectors of the economy w hen the size of the sector is considered (Christiaensen, Demery, Kuhl, 2011). This may be due to the high levels of participation of the extreme poor in agricultural industries (Christiaensen et al., 2011). Growth in the agricultural sector is also known to have significant spillover effects into other sectors of the economy and to disproportionately benefit the poorest citizens in many cases (Valdà ©s, Foster, 2010). All this is relevant to Latin America due its relatively large agricultural sector and its longstanding struggle with poverty that dates back many decades. Latin America is known for its high level of inequality and high rates of poverty. For example, in the 1980s the poor made up 19% of the continents population (Cardoso, Helwege, 1992) with roughly 8% living on a dollar a day (Anderson, Cockburn, Martin, 2011). Although poverty has declined in recent years many governments are still grappling with this issue and research shows many Latin American nations benefiting from a global liberalization of agricultural trade. Brazil is a Latin American country that is often cited as being perfectlyShow MoreRelatedFree trade and Agriculture in the Global South 1491 Words   |  6 Pagespositively affected by the trade agreements established by both the WTO and Fair Trade system; specifically the banana and coffee farmers. The governments role was to liberalize trade by reducing tariffs and they initiated this by introducing GATT (General Agreement on Trade and Tariffs). This was an agreement between countries that slowly expanded to include countries. Agricultural Trade was left out of the GATT due to the U.S. and European Union banana war. 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