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Freer International Trade and the Consequences for EU rural areas

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  • Bureau, Jean-Christophe

Abstract

General equilibrium models estimated by various authors and institutions show that, although trade liberalization leads to aggregate welfare gains, there are winners and losers when it comes to the distribution. The aim of this article is to determine to what extent rural regions have won or lost in the trade opening process that has been underway since the 1990s. The economic literature on international trade and regional development suggests the presence of opposing forces, making the global impact of international trade liberalization on rural areas ambiguous. Using a series of empirical studies, in particular the DREAM model (CEPII), the author assesses the impact of trade opening on the European Regions, observing a significant proportion of losers in the trade liberalization process among the rural regions of Europe. The article concludes with an analysis of the negative effects of welfare losses on the environment and territorial ordering in many rural regions, and suggests the need to address the problem by modifying current EU policies. Comercio internacional libre y las consecuencias para las áreas rurales europeas Resumen Los modelos de equilibrio general estimados por varios autores e instituciones muestran que, aunque la liberalización del comercio conduce a un bienestar agregado, hay ganadores y perdedores cuando se tiene en cuenta la distribución. El objetivo de este artículo es determinar que regiones rurales han ganado y cuáles han perdido en el proceso de apertura de los mercados que está en proceso desde 1990. La literatura económica sobre comercio internacional y desarrollo regional sugiere que la presencia de fuerzas de oposición, hace que el impacto global de la liberalización internacional del mercado sobre las áreas rurales sea ambiguo. Usando una serie de estudios empíricos, en particular el modelo DREAM (CEPII), el autor asegura el impacto de la apertura de mercados en las regiones europeas, observando una proporción significativa de perdedores entre las regiones rurales de Europa. El artículo concluye con un análisis de los efectos negativos de las pérdidas de protección sobre el ambiente y el territorio, y sugiere la necesidad de dirigir el problema mediante una modificación de las políticas actuales de la UE. Palabras clave: liberalización de mercado, regiones rurales europeas, política de desarrollo rural.

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Bibliographic Info

Article provided by Spanish Association of Agricultural Economists in its journal Economia Agraria y Recursos Naturales.

Volume (Year): 06 (2006)
Issue (Month): 12 ()
Pages:

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Handle: RePEc:ags:earnsa:7995

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Related research

Keywords: Trade liberalization; European Rural regions; rural development policies; International Relations/Trade; O18;

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References

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  1. Jean-Christophe Bureau & Antoine Bouet, Yvan Decreux, Sébastien Jean, 2005. "Multilateral agricultural trade liberalization: The contrasting fortunes of developing countries in the Doha Round," The Institute for International Integration Studies Discussion Paper Series iiisdp060, IIIS.
  2. Forslid, Rikard & Haaland, Jan I. & Midelfart Knarvik, Karen Helene, 2002. "A U-shaped Europe?: A simulation study of industrial location," Journal of International Economics, Elsevier, vol. 57(2), pages 273-297, August.
  3. Maureen Kilkenny, 1995. "Transport Costs and Rural Development," Food and Agricultural Policy Research Institute (FAPRI) Publications 95-wp133, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  4. Elisenda Paluzie Hernandez, 1999. "Trade policy and regional inequalities," Working Papers in Economics 48, Universitat de Barcelona. Espai de Recerca en Economia.
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  7. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
  8. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
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  10. Ottaviano, G.I.P. & Thisse, J.-F., 1999. "Integration, Agglomeration and the Political Economics of Factor Mobility," Economics Working Papers eco99/27, European University Institute.
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  12. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  13. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-FranÁois Thisse, 2002. "Agglomeration and Trade Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 409-436, May.
  14. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
  15. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669 Elsevier.
  16. Hertel, Thomas & Maros Ivanic & Paul Preckel & John Cranfield, 2003. "Trade Liberalization and the Structure of Poverty in Developing Countries," GTAP Working Papers 1207, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  17. Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, vol. 108(450), pages 1463-82, September.
  18. Schmitt, Bertrand & Henry, Mark S., 2000. "Size and growth of urban centers in French labor market areas: consequences for rural population and employment," Regional Science and Urban Economics, Elsevier, vol. 30(1), pages 1-21, January.
  19. CAVAILHÈS, Jean & GAIGNÉ, Carl & THISSE, Jacques-François, 2004. "Trade costs versus urban costs. Do jobs move to the suburbs or to the sticks ?," CORE Discussion Papers 2004021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  20. Matthieu Crozet & Pamina Koenig-Soubeyran, 2002. "Trade Liberalization and the Internal Geography of Countries," Working Papers 2002-37, Centre de Recherche en Economie et Statistique.
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