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Developing Countries and the Gains from Regionalism: Links between Trade and Farm Policy Reforms in Mexico

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  • Mary E. Burfisher
  • Sherman Robinson
  • Karen Thierfelder

Abstract

We use a multi-country computable general equilibrium (CGE) model with agricultural policy details to simulate the effects of North American Free Trade Agreement (NAFTA). We find that Mexico gains from NAFTA only when it also removes domestic distortions in agriculture. In that case, agriculture can generate allocative efficiency gains large enough to offset the terms of trade losses that arise because Mexico has higher initial tariffs than its NAFTA partners. When an RTA forces a developing country to reform its domestic distortions that are linked to trade restrictions, it becomes a building block toward multilateralism. Copyright 2002, Oxford University Press.

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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 84 (2002)
Issue (Month): 3 ()
Pages: 736-748

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Handle: RePEc:oup:ajagec:v:84:y:2002:i:3:p:736-748

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Cited by:
  1. Doan, Darcie & Goldstein, Andrew & Zahniser, Steven & Vollrath, Tom & Bolling, Chris, 2005. "North American Integration in Agriculture: A Survey," 2004 NAAMIC Workshop I: North American Agrifood Market Integration: Current Situtation and Perspectives 163851, North American Agrifood Market Integration Consortium (NAAMIC).
  2. Jensen, Henning Tarp & Robinson, Sherman & Tarp, Finn, 2002. "General equilibrium measures of agricultural policy bias in fifteen developing countries," TMD discussion papers 105, International Food Policy Research Institute (IFPRI).
  3. Doan, Darcie & Goldstein, Andrew & Zahniser, Steven & Vollrath, Thomas L. & Bolling, H. Christine, 2004. "North American Integration In Agriculture: A Survey Paper," North American Agrifood Integration: Situation and Perspectives, May 2004, Cancun, Mexico 16730, Farm Foundation.

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