Abstract
Background
The agreement on agriculture and the World Trade Organization were major outcomes of the 1986–1994 Uruguay Round (UR) negotiations within the General Agreement on Tariffs and Trade (GATT). The measures under the UR were predicted to increase poverty in developing countries, a serious cause for concern since poverty alleviation is a major goal of developing countries. Thus this paper simulated the impact on poverty of the UR for a net food importing country, Trinidad and Tobago.
Objective
The objectives of the study were to determine the changes in poverty levels in Trinidad and Tobago that we expected would result from changes in the price levels of food commodities after the removal of trade protection following the UR, and to examine recent trends in poverty in Trinidad and Tobago and the prices of major agricultural exports from the United States, its principal trading partner.
Methods
A regression model (poverty model) was used to determine the relationship between poverty levels and the prices of sensitive imported food commodities (SIFCs) and other key economic variables. Impact models were used to project changes in world market prices of the SIFCs due to the UR, and these price changes were used to predict changes in poverty in Trinidad and Tobago.
Results
The results showed a positive elasticity between poverty and the prices of SIFCs. The study also predicted that the average projected increase in price levels of the SIFCs of less than 9% by the year 2000 would cause an increase in poverty in Trinidad and Tobago of less than 4%.
Conclusions
There has been, in fact, a small decline in poverty in Trinidad and Tobago since 1996. The prices of major agricultural exports from the United States have also been falling since 1995. Thus, so far the UR has had no perceptible effects in increasing the prices of food exports from the United States. Also, so far the UR has had no perceptible effect on the poverty level in Trinidad and Tobago.