Whither commodity-based trade?

This paper examines the potential impacts of Commodity-Based Trade (CBT) on animal-production importing markets and identifies which suppliers could benefit from greater access to these markets. The paper distinguishes between the concepts of “commodity” and “product”; commodities are bulk of goods while products are goods that are branded and produced for a specific buyer.

The document states that a number of key issues will influence the scope, impact, and success of CBT in promoting improved market access for developing country suppliers. In addition, CBT can enhance the attractiveness of expanding domestic production in beneficiary markets, but this will depend in large part on the trade opportunities generated by CBT.

The main conclusions are:

• an important component that underpins the success of CBT is the existence of preferential trading arrangements
• preferential trading arrangements will further influence the ability of emerging African suppliers to compete in global markets
• the preferential trade and competitiveness narratives suggest that the long-term viability of CBT for African producers rests in the ability to target and capture specific niche markets
• for commodity-beneficiaries, such as Brazil and India, CBT will provide greater opportunities for producers, smallholders and larger commercial producers alike, with access to international markets
• in product beneficiary countries, commodity-based trade will have similar, but possibly more modest impacts
• in general, the benefits of CBT are much more likely to be felt in countries such as Argentina, Brazil, and India than in countries of Africa.