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Doha Round of the World Trade Organization: Appraising Further Liberalization of Agricultural Markets, The

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Abstract

Using the Food and Agricultural Policy Research Institute (FAPRI) modeling system, we investigate the multilateral removal of border taxes and farm programs and their distortion of world agricultural markets. We find that agricultural and trade distortions have significant terms-of-trade effects. Terms-of-trade effects caused by trade barriers are much larger than those caused by domestic farm programs. World trade is also significantly impacted. Trade expansion is substantial for most commodities, especially dairy, meats, and vegetable oils. Net agricultural and food exporters, such as Brazil, Australia, and Argentina, emerge with expanded exports, whereas net importing countries with limited distortions before liberalization are penalized by higher world markets prices and reduced imports. The United States gains significant export shares in livestock products and imports more dairy products. Without protection and domestic subsidies, the European Union loses many of its livestock and dairy export markets. The increase in world market prices would offset at least a portion of the subsidies foregone by U.S. producers.

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Bibliographic Info

Paper provided by Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 02-wp317.

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Date of creation: Nov 2002
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Handle: RePEc:ias:fpaper:02-wp317

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Keywords: Doha Round; domestic farm program; liberalization; partial equilibrium; trade distortion; World Trade Organization.;

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  1. Martin, W. & Winters, L.A., 1995. "The Uruguay Round and the Developing Countries," World Bank - Discussion Papers 307, World Bank.
  2. Xinshen Diao & Terry Roe & Agapi Somwaru, 2002. "Developing Country Interests in Agricultural Reforms under the World Trade Organization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 782-790.
  3. Stefan Tangermann, 2001. "L'Accord sur l'Agriculture de l'Uruguay Round fonctionne-t-il ?," Economie Internationale, CEPII research center, issue 87, pages 15-44.
  4. Hoekman, Bernard & Anderson, Kym, 1999. "Developing country agriculture and the new trade agenda," Policy Research Working Paper Series 2125, The World Bank.
  5. Kennedy, P. Lynn & Brink, Lars & Dyck, John H. & MacLaren, Donald, 2001. "Domestic Support: Issues And Options In The Agricultural Negotiations," Commissioned Papers 14622, International Agricultural Trade Research Consortium.
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