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Implications of Domestic Support Disciplines for Further Agricultural Trade Liberalization

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  • Keith Walsh
  • Martina Brockmeier
  • Alan Matthews

Abstract

This paper employs the GTAP computable general equilibrium model and dataset to analyse the implications of domestic support reductions in the context of agricultural trade liberalisation. Three specific issues are addressed: overhang in domestic support, the accurate distinction of the boxes in the GTAP dataset and the treatment of market price support in the amber box. An extensive domestic support database is used to calculate the change in applied domestic support rates from a specified cut in bound rates, and to identify the impact on the different domestic support boxes and the required reductions in each support category. The GTAP model is extended to incorporate an explicit representation of the market price support element of the AMS. The results from these extensions of the standard database and model support the view that the impact of an agreement to reduce domestic support will be limited and lower than conventionally estimated. Results of simulations combining domestic support cuts with market access and export competition disciplines show that the effect of import tariff reductions dominate the gains from domestic support cuts once full account is taken of the issues addressed in this paper.

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Bibliographic Info

Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp99.

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Date of creation: 15 Dec 2005
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Handle: RePEc:iis:dispap:iiisdp99

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Keywords: WTO agricultural negotiations; domestic support; agricultural protection; Aggregate Measure of Support;

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References

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  1. Dimaranan, Betina V. & Hertel, Thomas W. & Keeney, Roman, 2003. "OECD Domestic Support and the Developing Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22000, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Antoine Bouët & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2004. "Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round," Working Papers 2004-18, CEPII research center.
  3. W. Jill Harrison & Mark Horridge & K.R. Pearson & Glyn Wittwer, 2002. "A Practical Method for Explicitly Modeling Quotas and Other Complementarities," Centre of Policy Studies/IMPACT Centre Working Papers ip-78, Victoria University, Centre of Policy Studies/IMPACT Centre.
  4. Chad E. Hart & John C. Beghin, 2004. "Rethinking Agricultural Domestic Support under the World Trade Organization," Food and Agricultural Policy Research Institute (FAPRI) Publications 04-bp43, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  5. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," The World Economy, Wiley Blackwell, vol. 28(9), pages 1301-1327, 09.
  6. Keeney, Roman & Thomas Hertel, 2005. "GTAP-AGR : A Framework for Assessing the Implications of Multilateral Changes in Agricultural Policies," GTAP Technical Papers 1869, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  7. Joseph Francois & Hans van Meijl & Frank van Tongeren, 2005. "Trade liberalization in the Doha Development Round," Economic Policy, CEPR & CES & MSH, vol. 20(42), pages 349-391, 04.
  8. W. Jill Harrison & K.R. Pearson, 1994. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Centre of Policy Studies/IMPACT Centre Working Papers ip-64, Victoria University, Centre of Policy Studies/IMPACT Centre.
  9. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, World Bank Group, vol. 18(2), pages 175-204.
  10. Dimaranan, Betina & Hertel, Thomas & Keeney, Roman, 2003. "OECD Domestic Support and Developing Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  11. W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 1999. "Decomposing Simulation Results with Respect to Exogenous Shocks," Centre of Policy Studies/IMPACT Centre Working Papers ip-73, Victoria University, Centre of Policy Studies/IMPACT Centre.
  12. Diao, Xinshen & Elbehri, Aziz & Gehlhar, Mark J. & Gibson, Paul R. & Leetmaa, Susan E. & Mitchell, Lorraine & Nelson, Frederick J. & Nimon, R. Wesley & Normile, Mary Anne & Roe, Terry L. & Shapouri, S, 2001. "Agricultural Policy Reform In The Wto: The Road Ahead," Agricultural Economics Reports 34015, United States Department of Agriculture, Economic Research Service.
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Cited by:
  1. Brink, Lars, 2007. "Classifying, Measuring and Analyzing WTO Domestic Support in Agriculture: Some Conceptual Distinctions," Working Papers 7337, Canadian Agricultural Trade Policy Research Network.

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