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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.

Suggested Citation

  • Mary E. Burfisher & Sherman Robinson & Karen Thierfelder, 2002. "Developing Countries and the Gains from Regionalism: Links between Trade and Farm Policy Reforms in Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 736-748.
    • Handle: RePEc:oup:ajagec:v:84:y:2002:i:3:p:736-748
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00331
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    Cited by:

    1. 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.
    2. Yu, Jisang & Kim, Jiyeon, 2022. "Economic Impacts of Free Trade Agreements: The Case of the Korea-Chile Free Trade Agreement and Fruit Farms in Korea," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322229, Agricultural and Applied Economics Association.
    3. 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 Situation and Perspectives 163851, North American Agrifood Market Integration Consortium (NAAMIC).
    4. 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).

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