ESCAP Studies in Trade and Investment

English
ISSN: 
2414-0953 (online)
http://dx.doi.org/10.18356/d2fc0183-en
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This series focuses on developments in international and intra-regional trade, as well as economic and social development in Asia and the Pacific, as curated by researchers on the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
 
Facilitating Agricultural Trade in Asia and the Pacific

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English
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Author(s):
ESCAP
31 Dec 2011
Pages:
79
ISBN:
9789210564762 (PDF)
http://dx.doi.org/10.18356/8da51b4c-en

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The Asia-Pacific region is both a major consumer and producer of agricultural products. Its growth in both imports and exports is accelerating, but not to the potential. There is significant opportunity in this region to expand agro-trade especially due to population growth, dietary change of consumers and trade of high-value products. This publication examines a number of constraints that act as barriers to realizing the trade potential of the Asia-Pacific region: cumbersome trade procedures, inadequate compliance to product standards, poor trade logistics and lack of financing for agricultural trade. Some Asia-Pacific countries have adopted effective measures to deal with the problems presented. Still, many countries in this region lag behind in facilitating agricultural trade and will need to adopt similar measures.
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  • Acknowledgement
  • Preface
    Trade is considered ‘the engine for growth’. Agricultural trade adds more value to this statement since livelihoods of millions of people are dependent on the agriculture supply chains. Hence trade facilitation for agricultural products is significant for socio-economic development of the Asia-Pacific region. It is tied with employment concerns, the development of small and medium enterprises and basic food security. In the context of depleting natural resources also, agricultural trade is a much discussed topic.
  • Abbreviations and acronyms
  • Overview of the agricultural trade in Asia and the Pacific Region
    Over 900 million people in the Asia-Pacific region live on less than $1.25 a day (ESCAP 2010), making the region home to more than two-thirds of the world’s poor. Most of the region’s poor, for whom agriculture is the primary source of livelihood (FAO 2009), live in rural areas (ADB). Agriculture accounts for a quarter of the gross domestic product (GDP) of Asia-Pacific’s developing countries and employs about 60% of the region’s working population (ESCAP 2008). ESCAP research (2008) shows that improving agricultural productivity could pull 218 million people out of poverty in this region. It can bring investment opportunities for the private sector, and be a driver for boosting agriculturerelated industries. The World Bank (2007) estimates that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture. These figures indisputably show the importance of agriculture in reducing poverty.
  • Bottlenecks for facilitating agricultural trade
    Agricultural supply chain is generally considered the most complex in terms of movement of goods and services especially due to their time and temperature sensitive nature. Significance of import quotas and export subsidies has lowered over the last decade, while the agricultural products are reported to have largest number of non-tariff measures (NTM) complaints compared to that of other sectors (Tongeren and Disdier 2010). Agrotrade suffers from a range of constraints causing time delays and incurring additional cost leading to increased transaction cost for traders. These include cumbersome custom procedures, poor capacity of meeting product standards and regularly varying standards, unavailability of proper trade logistics services, lack of trade finance and infrastructure issues such as poor border facilities. And the list goes on. These constraints can be divided into four main categories: Trade Procedures, Product Standards, Trade Logistics and Trade Finance. These are significant challenges to Trade Facilitation in agriculture which eventually impact trade competitiveness.
  • Trade facilitation measures for agricultural trade in Asia and the Pacific
    While there are numerous challenges to trade in agro-products, there are number of good initiatives in facilitating agro trade in the Asia-Pacific region. Referring to these and other global initiatives, this chapter will highlight the measures that could be adopted for greater agro trade. The discussion is organized into four sections corresponding to the basic classification of constraints: procedures, standards, finance and logistics.
  • Advancing agro-trade facilitation
    The analysis has attempted to provide an overview of the agricultural trade facilitation, its status, concerns and remedies in the Asia-Pacific region. The first part of the paper mainly argued that agricultural trade is highly significant for is economic growth and there is further potential for Asia-Pacific to gain from this trade. It analyses the growth trend of agricultural trade and compares with leading trading countries globally. Although not beyond manufacturing, a definitive growth-trend of agricultural trade for the Asia-Pacific region is observed. It also looks at the value of trade in comparison with top trading countries in the World. The contribution of Asia-Pacific countries in intra-regional trade was analysed. The analysis mainly recognized the excellent growth trend for agro-trade and significant contribution of few Asia-Pacific countries to such growth. The traded product categories reflected the higher incomes of Asia-Pacific economies. The chapter ended by highlighting why facilitating agricultural trade is important for the Asia-Pacific region.
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