By Timothy Edward Josling
Bankruptcy on Ecuador bargains a comparability with different Andean Pact international locations. It argues that Ecuador is such a lot short of balance and safeguard provided through neighborhood marketplace entry.
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Additional info for Agricultural Trade Policies in the Andean Group: Issues and Options (World Bank Technical Paper)
This has two impacts: it encourages those countries to import higher-cost MERCOSUR goods in place of imports from the world market, and it obliges them to grant higher protection for domestic producers. Both the trade diversion and the higher protection have an economic cost. See Alberto Valdés, "Joining an Existing Regional Trade Agreement from the Perspective of a Small Open Economy - Chile's Accession to NAFTA and MERCOSUR", American Journal of Agricultural Economics, (forthcoming). Page 7 The Andean Pact holds out some advantages for Bolivia in the area of agricultural trade but also some potential disadvantages.
To negotiate prices at which domestic crops are sold would seem to perpetuate a structure of oligopsony in marketing and dependence on political strength in policy setting. It shows a lack of confidence in the ability of the liberalized market to clear. 75. 18 The procurement system is described in World Bank, op. 78. Page 12 It is quite possible that some form of income aid will still be needed for those farmers not close to market outlets that might otherwise suffer from the removal of state purchasing.
Agriculture accounts for about 15 percent of GDP but the export of agricultural products contributes thirty percent of Ecuador's total export earnings. Cocoa, coffee, rice and bananas are the principle export crops. S. Ecuador shares a border with Colombia and a contested border with Peru. 20 In the upland (Sierra) area production of staples such as corn, beans and potatoes, and the raising of livestock are the main activities, often on large haciendas. In the coastal lowland areas (costa) plantations grow export crops of bananas, coffee and cocoa.
Agricultural Trade Policies in the Andean Group: Issues and Options (World Bank Technical Paper) by Timothy Edward Josling