This chapter aims to synthesize key findings from the SURE-Farm project. We first discuss possible amendments to the framework to assess the resilience of farming systems. We then review why many of Europe’s farming systems face a formidable and structural resilience crisis. While emphasizing the diversity of resilience capacities, challenges and needs, we formulate cornerstones for possible resilience-enhancing strategies. The chapter concludes with critical reflections and suggestions for resilience-enhancing strategies that comprise the levels of farms, farming systems and enabling environments. We identify limitations of the research and suggest avenues for future research on the resilience of farming systems.

Risk and risk management are essential elements of farming. We show that strategies to cope with risk often go beyond the level of the individual farm. Cooperation, learning and sharing of risks play a vital role in European agriculture. An enabling environment should support cooperative approaches, enable a diversity of risk management solutions and harness novel technological opportunities.

INTRODUCTION

THE HISTORY of the GATT's legal relationship with developing countries points to one major question throughout. Is the current GATT legal policy in the best interest of the developing countries themselves, or would developing countries achieve better results if they were to agree to a legal policy based on the GATT's two main principles of reciprocity and non-discrimination?

This question has been debated ever since 1947. It is still being debated today. Despite the GATT's repeated formal endorsement of the principle of non-reciprocal and preferential treatment, opposition to that principle is probably greater today than at any other time. The governments of developed countries sign the declarations, but they do not believe in what they are doing. A growing number of governments in developing countries have doubts. And commentators, especially those from developed countries, become more critical every year.

The disagreement has a paralyzing effect on GATT reform. All participants agree that the GATT system has been losing ground since the mid-1970s and that it needs to move forward in order to regain its effectiveness. On matters of policy towards developing countries, however, the GATT membership finds itself pulling in opposite directions, with one group of countries calling for extension of the current policy while another group asks that it be discarded as a failure.

IN THE YEARS following the 1954 Review Session, the question of the GATT's relationship to developing countries continued to grow in importance. According to Karin Kock, the Swedish expert on GATT affairs, the issue became critical once it became clear that a large number of British and French colonies were soon to achieve independence. “Cold War” competition for the loyalty of these emerging countries intensified when the Soviet Union began to press for the creation of a global trade organization, within the United Nations, that would provide an alternative to the Western-dominated GATT. The prospect of a rival United Nations organization grew more substantial each year and finally materialized in the form of the United Nations Conference on Trade and Development (UNCTAD), formally constituted in 1964.

CHANGES IN BARGAINING POWER

By the early 1960s, GATT relations between developed and developing countries had become almost totally centered on competition with UNCTAD in the making. The UNCTAD threat considerably augmented the bargaining power of developing countries. Developed countries believed that a bloc decision not to participate in the GATT would be seriously damaging to Western political interests; they were therefore willing to pay a price to avoid it. Developing countries knew this and asked for a great deal. In the end, however, the UNCTAD threat had its limits. Developing countries knew that the GATT was useful to them and they knew that a United Nations type organization might not be able to replace it.

THE FIRST half of the 1980s has produced no important change of direction in developing-country policy. The events of this period could generally be described as a further elaboration of the main themes laid down in the previous twenty years. At the level of formal recognition, the commitment of governments to current developing-country policy has continued to escalate. Practical elaboration of these general principles has also moved ahead slightly, but not with the same sense of progress. Indeed, there is a growing sense that the practical benefits of this policy may be very small, perhaps even non-existent.

The current situation, then, presents a rather odd picture of things moving in different directions. Even though there is an increasing awareness of problems at the implementing level, the formal commitment to the current policy continues to get stronger every year. As criticism of the policies of developing countries increases, so do the rhetorical and institutional barriers to reconsideration.

The present chapter describes recent developments in three areas which illustrate the current situation.

EMERGING INTERNATIONAL LAW OF DEVELOPMENT

In 1974, the United Nations adopted two major resolutions, one calling for the New International Economic Order and the other declaring a Charter of Economic Rights and Duties of States. Shortly after, legal experts in various parts of the world began working in earnest on the question of whether the principles affirmed in these documents deserved to be recognized as rights and obligations of international law proper.

INTRODUCTION

ON 30 OCTOBER 1947, governments of twenty-three countries signed the Final Act of the General Agreement on Tariffs and Trade (GATT). The General Agreement created a legal framework for a mutual reduction in tariffs negotiated between the signatory governments. It contained, first, each government's commitment to reduce tariffs (called its Schedule of Concessions) and, second, a code of behavior regulating other forms of government interference with international trade.

The GATT code of behavior rested on three central principles. The first was that while governments would not be prohibited from protecting domestic industries against foreign competition, all such protection should be in the form of tariffs. Under this first principle, governments accepted the obligation to eliminate the many other kinds of non-tariff measures affecting trade that had become common in the pre-war years – above all, restrictions limiting the quantity of imports allowed. The second principle was that while there would be no a priori limits on tariff levels, governments would participate in periodic negotiations aimed at gradually reducing existing levels. The third was the most-favored-nation (MFN) principle, requiring governments to treat the trade of all other GATT countries equally. Under the MFN principle, any advantage given to one GATT country had to be given immediately, and unconditionally, to every other GATT country.

THE SCHEDULING of the UNCTAD conference for the spring of 1964 precipitated an effort within the GATT to demonstrate more forcefully its commitment to the interests of developing countries. The first step was a decision to draft amendments to the legal text of the General Agreement that would consolidate the various strands of the GATT's emerging policy towards developing countries. Initially, it was contemplated that the new legal text would be placed in Article XVIII. The new text grew so long, however, that at the last moment it was re-packaged as a new Part IV of the General Agreement.

PART IV OF THE GATT

The importance of Part IV is not easy to describe. From a technical point of view, Part IV added nothing to the existing legal relationship between developed and developing countries. Part IV was only a slightly more impressive statement of the urgent but non-binding texts that the Action Program had been issuing over the preceding five years, giving them a permanent form in the text of the General Agreement. The language of Part IV was a bit more legalistic, giving the illusion of greater commitment. Indeed, the title of the new Article XXXVII, “Commitments”, actually said so. In fact, however, the text of Part IV contained no definable legal obligations.

THE PRESENT chapter examines the effect that GATT legal policy has on the decision-making process of the governments of developing countries. The reason for beginning here is the author's conviction that a government's own trade-policy decisions are the most important determinant of its economic welfare. It is here that the GATT's legal policy can make its most important contribution to developing-country welfare or do the greatest harm.

The chapter begins with what might be called a model – a rather lengthy analysis of how the decision-making process of the governments in developed countries is affected by the GATT legal obligations they have accepted. This model is then used to consider how decision-making processes in developing-country governments would be affected by either of two GATT legal policies – (i) the GATT's current no-obligations policy towards developing countries and (ii) an alternative GATT legal policy that would require developing countries to accept roughly the same obligations as developed countries, the alternative sought by most critics. The impact on developing countries will be considered under each of the two contending economic assumptions in this area: that intervention policies are harmful and that they are helpful.

The chapter concludes that the GATT's current policy is harming developing countries more than it is helping them, even under the assumption that developing countries can be helped by infant-industry policies.

IN THE EARLY 1970s, GATT governments began to plan the Tokyo Round of multilateral trade negotiations, known formally as the Multilateral Trade Negotiations, or MTN. Discussions began in 1972, and GATT trade ministers formally convened the negotiations and established the negotiating rules in Tokyo in September 1973. The negotiations started very slowly and did not end until the summer of 1979. Implementation of the Tokyo Round agreements took several more years.

LEGAL POLICY OF THE UNITED STATES

The decade in which the Tokyo Round negotiations took place witnessed a sharp turn – or at least an attempted sharp turn – in GATT legal policy. A serious effort was made to revive legal discipline among developed countries. In the very simplest terms, the effort can be seen as a change in the United States' policy towards GATT law. In the 1960s that policy had been dominated by two factors:

1. (a) The United States had a strong and growing economy.

2. (b) The political interests of the United States called for effective European integration and the growth of a strong and stable Japan.

During the 1960s both the European Community and Japan had employed a number of market-distorting measures in pursuit of their own economic and political development. It is not clear that such measures were actually beneficial, but the governments seemed to think they were and so the United States had tolerated them.

THE FOLLOWING two chapters examine the extent to which the GATT's current policy towards developing countries is likely to be effective in persuading the governments of developed countries to reduce trade barriers or otherwise improve the market access for the exports of developing countries. The present chapter considers the effectiveness of the non-reciprocal legal relationship sought by developing countries. The following chapter will consider the effectiveness of the commitment to obtaining preferential terms of market access.

One general caveat must be entered as to the analysis in both chapters. In principle, the legal policies being advocated by developing countries are meant to apply to all sectors of trade, agricultural as well as industrial. In practice, most of the debate about the effectiveness of those legal policies tends to focus on their effectiveness in lowering trade barriers in the industrial sector. It is usually taken for granted that trade barriers on the agricultural side are more deeply rooted and that more basic reforms may be needed before this or any other legal policy is going to have much chance of success. The analysis in the following two chapters is subject to the same reservation about trade in agricultural products.

BASIC POSITIONS REVIEWED

The debate over the effectiveness of the current non-reciprocal legal relationship between developed and developing countries is essentially a legal debate. All sides would agree that the objective -- reduction of trade barriers by developed countries -- is economically beneficial for developing countries.

GATT LEGAL policy towards developing countries owes nothing to the past. There was no Golden Age that pointed the way. Before 1939, the organizing principle for rich-poor relationships had been colonialism. Most of the countries in Africa and Asia were colonies de jure. A goodly portion of those in Central and South America were colonies de facto. This colonial past was not what the post-1945 world was looking for. The world required a clean start – a completely new departure.

Policy in the United States before 1939 stood apart from the explicitly colonial policies of the other major powers. The United States had few de jure colonies. Although its economic and political relationship with most Latin American countries was de facto colonial, its formal legal relationship with those countries consisted of conventional sovereign-to-sovereign dealings, with very few of the preferential qualities found in the typical colonial relationship. In the years 1934–42, the United States negotiated reciprocal trade agreements with twenty-seven countries, including the following sixteen developing countries: Cuba, Haiti, Brazil, Honduras, Colombia, Guatemala, Nicaragua, El Salvador, Costa Rica, Ecuador, Turkey, Venezuela, Argentina, Peru, Uruguay and Mexico. Each agreement contained a reciprocal exchange of tariff reductions and a framework of other GATT-like obligations to protect the commercial value of the tariff reductions. None of these agreements called for special treatment because of developing-country status.