Agri-environmental programs in the US and EU and the future of the WTO a Political Economic Study

It has been widely recognized in both the US and EU that in order to construct agricultural policy packages that are both politically sustainable and in compliance with the requirements of the World Trade Organization (WTO), it is necessary to incorporate environmental provisions into these packages. The goal of this proposal is to investigate and compare the trend toward melding agricultural and environmental policy in the two regions, and to relate these developments to the current, Doha Round of negotiations over the WTO. As a preliminary step, we are presently completing a comparative analysis (Baylis et al., 2004) of the agri-environmental nexus in the US and the EU. 1 In that paper, we identify a number of key differences in the nature of this nexus in the two regions, and argue that they can be traced in large part to fundamental differences in the European and American political-economic landscapes. We now propose to explore the implications of these differences for the role that the WTO can play in promoting trade liberalization. The primary role of the WTO is to promote trade liberalization through its impact on the internally negotiated domestic and trade-related policies of its member countries. It follows that the primary measure of the WTO's ultimate success must be the overall quality—measured in terms of trade friendliness and market orientation—of the policy packages—e.g., the US's Farm Bill and the EU's CAP—that are negotiated by its members. The challenge confronting participants in the Doha Round, then, is to impose discipline on WTO member countries' internal policy-making processes, yet provide stakeholders within these countries with sufficient negotiating room to build politically sustainable coalitions in support of WTO-compatible trade-friendly policy packages. In the context or agri-environmental policy, the difficulty of this task is compounded because a common set of policy restrictions must be superimposed on multiple, quite distinct political-economic landscapes: a protocol that strikes the right balance between discipline and flexibility within one landscape may, in another, be too rigid, too permissive, or prohibit tradeoffs which might lead to compromise. Our proposed research will provide a framework for investigating this challenge. We propose to incorporate the political-economic differences identified in Baylis et al. (2004) into a pair of computable, multilateral negotiation models of the agri-environmental policy formation processes within the US and EU. We will then use these models to analyze and contrast how the internal ag-environmental policy negotiations within the two …