The Uruguay Round Agreement on Agriculture (URAA) marks a turning point in the regulation of international trade in agricultural goods. After more than four decades since the inauguration of the GATT, the agricultural sector is now included in the mainstream GATT/WTO rules. Even though the degree of liberalisation finally achieved under URAA tariff bindings has fallen well short of original expectations, the URAA has clearly succeeded in establishing a rule-based trading system for agriculture. Through the establishment of a multilateral framework for the discipline of agricultural trade, and achieving transparency in trade restrictions through the tariffication process, a firm foundation has now been laid for further liberalisation (Cline, 1995; Rayner et al., 1993; Martin and Winters, 1995). In order to build on this promising start to achieve orderly conditions in world agricultural trade, it is vital to broaden our understanding of the trade policy-making process in developing countries and the constraints, both perceived and real, faced by these countries in their attempts to comply with the new URAA rules. This paper aims to contribute towards this end through a case study of Sri Lanka.
The paper begins with an introduction to the agricultural sector in the Sri Lankan economy (Section 2). Section 3 provides an account of the current agricultural production and trade policies while paying attention to their roots in Sri Lanka’s economic policy history and the related socio-political considerations. Section 4 is the core of the paper. It examines Sri Lanka’s commitments to date to the URAA and constraints to further compliance with URAA provisions, followed by an assessment of the impact of URAA on world agricultural trade from the perspective of global trading opportunities for Sri Lanka. The paper ends in Section 5 with some concluding remarks.
Table of Contents:
• Agriculture in the Sri Lankan Economy
• Agricultural Policy
• Sri Lanka and the Uruguay Round
• Concluding Remarks
by Prema-Chandra Athukorala and Saman Kelegama