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Implications of Domestic Support Disciplines for Further Agricultural Trade Liberalization

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Author Info
Keith Walsh
Martina Brockmeier
Alan Matthews

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

Find related papers by JEL classification:
C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Anderson, Kym & Martin, Will, 2005. "Agricultural trade reform and the Doha development agenda," Policy Research Working Paper Series 3607, The World Bank. [Downloadable!]
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  2. Dimaranan, Betina & Hertel, Thomas & 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). [Downloadable!]
    Other versions:
  3. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, Oxford University Press, vol. 18(2), pages 175-204.
  4. Hart, Chad E. & Beghin, John C., 2006. "Rethinking Agricultural Domestic Support under the World Trade Organization," Staff General Research Papers 12510, Iowa State University, Department of Economics.
    Other versions:
  5. 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. [Downloadable!] (restricted)
  6. Dimaranan, Betina & Hertel, Thomas & Keeney, Roman, 2003. "OECD Domestic Support and Developing Countries," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  7. 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, Monash University, Centre of Policy Studies/IMPACT Centre. [Downloadable!]
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  8. Diao, Xinshen & Elbehri, Aziz & Gehlhar, Mark & Gibson, Paul & Leetmaa, Susan & Mitchell, Lorraine & Nelson, Frederick J. & Nimon, R. Wesley & Normile, Mary Anne & Roe, Terry & Shapouri, Shahla & Skul, 2001. "Agricultural Policy Reform In The Wto: The Road Ahead," Agricultural Economics Reports 34015, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  9. 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. [Downloadable!]
  10. W. Jill Harrison & Mark Horridge & K.R. Pearson & Glyn Wittwer, 2004. "A Practical Method for Explicitly Modeling Quotas and Other Complementarities," Computational Economics, Springer, vol. 23(4), pages 325-341, 06. [Downloadable!]
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  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, Monash University, Centre of Policy Studies/IMPACT Centre. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Brink, Lars, 2007. "Classifying, Measuring and Analyzing WTO Domestic Support in Agriculture: Some Conceptual Distinctions," Working Papers 14581, International Agricultural Trade Research Consortium. [Downloadable!]
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