ABSTRACT
This chapter (1) explores solutions to internal constraints to international trade, (2) discusses international trade agreements and negotiations, regional cooperation, and other solutions to trade problems, and (3) considers means of reducing price, production, and income instability problems associated with trade. Lack of access to developed country markets is probably the most severe external problem. Indirect restrictions such as overvalued exchange rates can be more significant sources of discrimination against agriculture than are direct restrictions such as export taxes and quotas. Trade negotiations were undertaken under the GATT starting in 1947, but before the 1990s they focused very little on agriculture. The WTO was formed during the Uruguay Round of GATT negotiations. It replaced the GATT and currently has roughly 164 member-nations. Developing countries have more power in the WTO than they had under the GATT, but the WTO is struggling to maintain momentum in liberalizing trade policies. Regional economic groupings of countries have become more prevalent and have increased regional trade, although their effects on total trade are less certain. International commodity agreements, compensatory financing, product diversification, and temporary export restrictions have been used by developing countries to address economic instability.
