Becoming exhausted with lengthy negotiations in the WTO, more countries are now interested in bilateral and multilateral Free Trade Agreements (FTA). Countries who participate in FTA can expect market access in goods and services with their partners through a relatively easier procedure than the WTO talks. However, especially in cases of bilateral FTA between developing and developed countries, it should be noted that there might be several disadvantages compared to multilateral trade agreements; trade diversion resulting in inefficiency, the weaker bargaining position of developing countries, "equal treatment" of partners results in unequal outcomes due to unequal capacity, and the proliferation of so many agreements puts pressure on management resources (Khor, 2005).

While FTA has both positive and negative impacts, more concern should be paid to the rural poor, who rarely benefit from trade liberalization but are vulnerable to its negative impacts. In case of an FTA between a strong country and a weak country, the negative impact is obvious. Mexico increased exports of fruits and vegetables by 50 per cent to the US after the North American FTA (NAFTA) was signed. But imports to Mexico from the US tripled for maize and rose by 500 per cent for soybean. Mexico's agricultural imports rose more than its exports and 1.7 million rural jobs have been lost, among them a number of maize farmers are supposed to be included (The Star, 2005).

If an FTA is signed among equal partners, all the participants can enjoy mutual benefits. However, looking at the micro level, every country has heterogeneous characteristics. Some areas with preferable conditions could gain more benefits of free trade, while farmers in the disadvantaged areas would be prone to losses due to severe competition with their counterparts, both domestic and foreign.

A detailed study was conducted to investigate differences in competitiveness of secondary crop production at the provincial level in China (Funing et al., 2001). In general, Chinese agriculture is thought to have better competitiveness in labour intensive crop production like vegetables but lower competitiveness in grain production (Morita, 2002). However, by comparing the coefficients in 30 provinces, which indicates comparative advantage of domestic crop production, the study has shown that competitiveness varies widely in respective provinces and out of the top one third provinces, eight provinces have enough competitiveness even for the world market. On the other hand, the bottom seven provinces, most of which are inland provinces with less advantageous areas in terms of agricultural production, have no competitiveness in maize production. We can understand that the effect of trade liberalization will be "mosaic" and gainers and losers will coexist, even in the same country.

As researchers working in the field of poverty alleviation, we are requested to consider what we should do in the era of FTAs? There are many studies which try to grasp the impact of free trade at the macro level. However, as we already know, macro data can show only one aspect of the phenomenon and the real situation of the rural poor tends to hide behind a bigger picture. We should pay more attention to what has happened and will occur in poverty prone rural areas by emerging FTAs and the completion of the current round of talks of the WTO. For example, more effort will be necessary to grasp changes affecting rural poor households by carefully monitoring the evolution of the situation. As every economic revolution produces successes and failures in villages, solicit the key factors in successful cases and genuinely consider how to disseminate those positive experiences. After all, there is no use implementing socio-economic studies if they are unable to contribute to alleviating poverty.

Written by Tomohide Sugino, Project Leader, AGRIDIV Project, UNESCAP-CAPSA, Bogor, Indonesia.

(References available upon request)