Agriculture Reference
In-Depth Information
that may serve legitimate social goals, but which may be regarded as impediments to
international trade.
A reduction in global trade barriers has led to an increase in trade over the past several
decades. While the WTO has numerous objectives, one of the primary ones is the reduction
of tariffs. The WTO has been successful in cutting worldwide tariffs to 5 percent (Veseth
and Uchitelle 2002)—down from 40 percent at the end of World War II. In addition, it has
made trade more transparent, as it has negotiated with countries to convert non-tariff trade
barriers into tariffs. Such changes clearly support the importance of the international market-
place for food and agribusiness fi rm managers. While some criticize and others praise the
WTO, one fact is clear: growth in international trade and investment is developing at a faster
pace than before and a lot of that growth can be attributed to the existence of the WTO.
Challenges in international markets
The path to successfully doing business in international agribusiness markets certainly has
its challenges. Some of the more dominant issues that fi rms face entering these markets are
discussed in this section. These challenges include: cultural differences, exchange rate fl uc-
tuations, accounting system differences, uncertainty of the political and economic climate,
property rights issues, regulations, sanitary and phytosanitary (SPS) rules, trade specifi ca-
tions, and the challenges of management in an international environment.
Plate 5.3
Woman riding planter
Food and agribusiness managers deal with people across the world who use different technologies
and for whom costs of production vary dramatically. Photo courtesy of USDA Natural Resources
Conservation Service.
