World commodity markets-and particularlythe markets for agricultural commodities-remain highlydistorted despite the wave of liberalization that has sweptworld trade since the 1980s. Some markets for commoditiesare characterized by imperfect competition. Where monopoliesor oligopolies in trade arise either because of governmentregulation or through other barriers to entry, distortionsmay arise that call for the application of antitrust law andother forms of pro- competitive policy action. Commoditymarkets are distorted on both the export and the importsides, with serious implications for world prices and theirvolatility. Governments also have a long history ofintervening in markets for other natural resources, bothrenewable and non-renewables. Protection rates for importsof non-agricultural natural resources are generally lowbecause of pressure from user industries. However, importingcountries confronting exporters of resources with marketpower and thus the ability to affect world prices may seekto use import tariffs or excise taxes to lower demand andshift rents away from supplying nations. In sum, a wide mixof policy instruments is used by countries to influence thelevel and volatility of domestic prices for commodities.Countries also pursue policies that may affect internationalprices, either indirectly or directly, if they are largesuppliers or importers.
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