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Bilateral Harmonization of EC and U.S. Agricultural Policies

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  • Mahe, Louis Pascal
  • Tavera, Christophe

Abstract

Agricultural policies in both Europe and the United States provide commodities with an excessively high and distorted pattern of support. The economic interdependencies of the policies give rise to adverse fiscal and economic costs, which are viewed as disharmonies in the existing policy measures both within and between the two regions. Unilateral and simultaneous EC and U.S. policy changes are simulated with an international trade model. They are carried in three steps: (1) grains and feeds, (2) beef and dairy, and (3) sugar. Both cross effects and own effects are examined on typical policy targets. Results suggest that while world prices are sometimes drastically altered, the magnitude of cross effects is small and sometimes ambiguous compared to own effects. Feed livestock linkages are dominant factors in the economic rationale behind the interactions between countries. The case for cooperation in this trade game is, however, supported by the evidence from at least a budget point of view.

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Bibliographic Info

Paper provided by University of Minnesota, Economic Development Center in its series Bulletins with number 7457.

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Date of creation: 1988
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Handle: RePEc:ags:umedbu:7457

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Keywords: Agricultural and Food Policy; International Relations/Trade;

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References

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  1. Honma, Masayoshi & Hayami, Yujiro, 1986. "Structure of agricultural protection in industrial countries," Journal of International Economics, Elsevier, vol. 20(1-2), pages 115-129, February.
  2. William H. Meyers & Michael D. Helmar & S. Devadoss, 1986. "FAPRI Trade Model for the Soybean Sector: Specification, Estimation, and Validation," Center for Agricultural and Rural Development (CARD) Publications 86-sr2, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. Runge, C. Ford & von Witzke, Harald & Thompson, Shelley, 1987. "Liberal Agricultural Trade As A Public Good: Free Trade Versus Free Riding Under Gatt," Staff Papers 13635, University of Minnesota, Department of Applied Economics.
  4. Mahe, Louis P, 1984. "A Lower but More Balanced Protection for European Agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 11(2), pages 217-34.
  5. Aniss Bahrenian & S. Devadoss & William H. Meyers, 1986. "FAPRI Trade Model for Feed Grains: Specification, Estimation, and Validation," Food and Agricultural Policy Research Institute (FAPRI) Publications 86-sr1, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  6. von Witzke, Harald & Houck, James P., 1987. "Economic Effects Of Possible European Community Market Intervention In Soybeans And Their Products," Staff Papers 14147, University of Minnesota, Department of Applied Economics.
  7. William H. Meyers & Michael D. Helmar & S. Devadoss, 1986. "FAPRI Trade Model for the Soybean Sector: Specification, Estimation, and Validation," Food and Agricultural Policy Research Institute (FAPRI) Publications 86-sr2, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  8. Aniss Bahrenian & S. Devadoss & William H. Meyers, 1986. "FAPRI Trade Model for Feed Grains: Specification, Estimation, and Validation," Center for Agricultural and Rural Development (CARD) Publications 86-sr1, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  9. de Veer, Jan, 1984. "Cereal Substitutes, Fat Tax and Price Distortion," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 11(2), pages 169-76.
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Cited by:
  1. Mohtadi, Hamid & Roe, Terry L., 1992. "Endogenous Growth, Health and the Environment," Bulletins 7521, University of Minnesota, Economic Development Center.
  2. van Tongeren, Frank & van Meijl, Hans & Surry, Yves, 2001. "Global models applied to agricultural and trade policies: a review and assessment," Agricultural Economics, Blackwell, vol. 26(2), pages 149-172, November.
  3. Johnson, Martin & Roe, Terry L. & Mahe, Louis Pascal, 1989. "The GATT Negotiations and US/EC Agricultural Policies Solutions to Noncooperative Games," Bulletins 7491, University of Minnesota, Economic Development Center.
  4. Hartmann, Monika & Schmitz, P. Michael, 1991. "Impact Of Ec'S Rebalancing Strategy On Developing Countries: The Case Of Feed," Staff Papers 14085, University of Minnesota, Department of Applied Economics.

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