Davis, Christina L. Food Fights over Free Trade.

Davis, Christina L. Food Fights over Free Trade. Princeton, NJ: Princeton University Press, 2003, 401 pp.

It is worthwhile for agricultural economists to take time periodically to look at the world from a different perspective. Christina Davis looks at trade liberalization from a historian/political scientist's

perspective, which is interesting and useful to the understanding of the World Trade Organization (WTO) and other bodies striving to reduce trade barriers. This book is worthwhile reading. The author focuses on the national and international institutions that facilitate or obstruct lowering trade barriers and past strategies that have been successful for the United States in interactions with the European Union (EU) and Japan. Policy changes that result from negotiations and rulings are emphasized, along with the underlying causes of those changes, rather than the effects of those changes. National and international institutions are a focal point throughout the book.

Davis provides a quantitative analysis of past trade liberalization in the European Union and Japan resulting from negotiations or disputes over quotas, tariffs, subsidies, and other regulations. The analysis has some problems because of the difficulties in measuring the dependent variable, the extent of liberalization. She classifies liberalization as a qualitative variable with classifications of none, minor, and major. She then uses an ordered probit model to investigate variables that account for the degree of liberalization in agricultural trade policies. The independent variables are also difficult to measure in many instances (e.g., specificity of threats, strength of cross-sectoral linkages).

The key finding is that trade negotiations in agriculture are much more effective when they are explicitly linked with negotiations in other sectors (cross-sector linkages). The agricultural lobbies in the European Union and Japan need to have internal pressure from other industries to reduce support prices, tariffs, and other distortions. Another conclusion is that domestic agricultural lobbies in Japan are willing to change policies if they are found to violate international law. The Japanese government will change a policy if a WTO dispute settlement panel rules (or is likely to rule) that the policy violates WTO rules. It is interesting that Davis finds that the European Union is not as likely to abide by such rulings. International rules are important to the European Union, but sometimes the preservation of peace within the European Union is more valued than peace with non-EU countries.

The quantitative analysis can be criticized because its results are not particularly instructive, and there is little opportunity to extend the results beyond the European Union and Japan. These two countries are indeed special cases with respect to agriculture and probably offer few insights into other countries, except maybe Korea (in Japan's case). The main contributions of the book, though, Ire the case studies of trade liberalization in he European Union and Japan. In these cases she has well-documented viewpoints from bureaucrats, negotiators, academics, and others who are knowledgeable about the WTO (and GATT) negotiations and dispute panels. The case study about Japan is particularly useful with an excellent historical context and good integration of politics.

Much of Davis' material in the case studies comes from individual interviews that contain information that is not otherwise available. She weaves these materials into a detailed analysis that is more micro-oriented than the approach that most agricultural economists would take. She demonstrates an impressive understanding of the institutions involved in the European Union and Japanese governments and a thorough understanding of the literature in many fields beyond agricultural economics.

The effects of cross-sector linkages in agricultural negotiations are best exemplified by the Tokyo Round versus the Uruguay Round. Davis argues that the Uruguay Round saw much greater liberalization in agriculture because the parties agreed during initial discussions that any failure of a negotiating group would stop the entire round (in contrast to the Tokyo Round where negotiating groups were not linked). Further, during the Uruguay Round, it became clear at the Brussels meeting in December 1990 that some nations (particularly the United States and the Cairns nations) were willing to let the entire round fail if there was no agreement on agriculture. This helped get the Japanese to lift their ban on rice imports and further lower import tariffs on beef, while getting the European Union to agree to limits on aggregate measures of support and on export subsidies. One factor that she fails to mention is that there had not been a long history of multilateral negotiations in agriculture because of specific exemptions, so one should not be surprised that the initial attempt to liberalize agriculture in the Tokyo Round would be a failure.

Davis argues that Japanese politicians can credibly argue that agricultural liberalization is politically impossible because of strong organizations within agriculture and the influence of rural voters on politicians. All political parties support agricultural protection, so voters can easily free to another party if the ruling party liberalizes agricultural trade too much. In order to get substantial agricultural liberalization, the Keidanren (the Japanese Federation of Economic Organizations) must be involved. The Keidanren views agriculture as a way to get trade concessions on industrial products and to defuse tensions emanating from the perpetual Japanese trade surplus.

The failure of the 1998 Asian Pacific Economic Council (APEC) Ministerial meeting is used as another example where weak cross-sectional linkages resulted in no progress on trade liberalization. Specifically, Japan refused to lower tariffs on forestry and fish products at the meeting despite the 1994 pledge to have free trade in the region by 2020. I believe, however, that most APEC countries had little confidence in the 1994 pledge and when it came to negotiating specific reductions, some countries (especially Japan) were unwilling to change. Japan and Korea also suffered from WTO negotiation fatigue; the commitment to free trade was too much and the timetable was too rapid.

Legal framing was found to be very effective in forcing the Japanese government to liberalize agricultural trade. I wonder why Davis did not delve into Japanese culture more and its relation to food, but maybe that would detract from the historical, institutional, and political slant of the book. The finding that Japanese politicians often succumb to pressure from the outside might stem from the Japanese culture of consensus. Consensus makes it difficult for reforming controversial sectors, such as agriculture, internally so legal framing allows international decisions (or threats of such decisions) to help change Japanese policies. The Japanese are also very concerned with their international image, so any legitimate international institution (such as the WTO) that finds Japanese policy against the rules is acted upon immediately.

Cross-sectoral linkages are the most important factor for the European Union, though maybe not as important as in Japan. European businesses are not as concerned with agricultural policy as Japanese businesses have been, so there is less pressure to import agricultural products. Further, internal subsidies often compensate EU food processors for high ingredient prices (especially for livestock products). Export subsidies are also granted to some higher-valued EU food products. Yet in the Uruguay Round negotiations, cross-sector linkages forced EU businesses to consider agricultural liberalization if progress was to be made in services, intellectual property, and other areas. Davis argues that those linkages turned the Germans in favor of agricultural liberalization (joining the British and Dutch) and forced the French to accept the Uruguay Round agreement for agriculture.

Davis is puzzled by the finding that the European Union often does not abide by GATT/WTO panel rulings, despite filing many of its own complaints. She suggests that holding the European Union's Common Agricultural Policy together and expanding the European Union into new geographic areas are more important than some panel rulings in agricultural disputes. I think the jury is still out on the ways that the European Union will ultimately respond to panel rulings. It is not surprising that European Union officials would hold off the implementation of some rulings because they are still developing relationships with their constituencies. Given time, the European Union might have enough confidence to make the difficult changes in specific agricultural policies that are called for by the dispute panels.

One might be disappointed that Davis offers no insights into the Doha Round specifically. Her observation would likely be that positioning in the pre-round negotiations is crucial if significant progress is to be made in agriculture. The one glance at the future offered is that agriculture is running out of cross-sector linkages as free trade becomes a reality in more product categories. I also wonder about the advantages of legal framing through the WTO dispute settlement procedures if countries continue to disregard the rulings. Rich countries will simply "buy" their way out of the rulings by allowing other countries to impose tariffs on their products. I do not see that as progress.

Michael Reed

University of Kentucky