Developing Countries Specialize in Agricultural Commodities After Free Trade Agreements With the United States

Free trade agreements (FTA) historically have boosted agricultural trade and production, particularly in developing countries where farming is often a vital pillar of the economy. Once an agreement is in place and trade flows begin to rise, a developing country’s agricultural sector can undergo significant transformations. When developing countries gain access to large consumer markets, like that of the United States, they often shift to specialization, producing commodities in high demand in those markets. The countries consolidate resources to increase production of commodities in which they have a competitive advantage relative to other countries. In the short term, this preference can shift resources and production away from other commodities, including staple crops. In the longer term, such changes could affect food security, economic development, and regional ecosystems.