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Dispelling Some Misconceptions about Agricultural Trade Liberalization

  • Stephen Tokarick
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    There has been a great deal of public discussion over the impact that agricultural trade liberalization would likely have, especially on low-income countries. Unfortunately, the public discussion has been characterized by a number of misconceptions. This paper provides a clarifying discussion of the issues involved. Among the key points addressed are 1) agricultural "subsidies" are not nearly as large as has been portrayed; 2) tariffs are actually far more distortionary than subsidies and some low-income countries actually benefit from rich country subsides; and 3) widespread tariff reductions will not inflict large damage on developing countries as a result of preference erosion. The case for removing agricultural trade barriers remains compelling, even without the exaggerations and misconceptions.

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.22.1.199
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    Article provided by American Economic Association in its journal Journal of Economic Perspectives.

    Volume (Year): 22 (2008)
    Issue (Month): 1 (Winter)
    Pages: 199-216

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    Handle: RePEc:aea:jecper:v:22:y:2008:i:1:p:199-216
    Note: DOI: 10.1257/jep.22.1.199
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    1. Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006. "The Relative Importance of Global Agricultural Subsidies and Market Access," CEPR Discussion Papers 5569, C.E.P.R. Discussion Papers.
    2. Anderson, Kym & Valenzuela, Ernesto, 2006. "The World Trade Organization's Doha cotton initiative : a tale of two issues," Policy Research Working Paper Series 3918, The World Bank.
    3. Baffes, John, 2004. "Cotton : Market setting, trade policies, and issues," Policy Research Working Paper Series 3218, The World Bank.
    4. Hans P. Lankes & Katerina Alexandraki, 2004. "The Impact of Preference Erosionon Middle-Income Developing Countries," IMF Working Papers 04/169, International Monetary Fund.
    5. Diao, Xinshen & Somwaru, Agapi & Roe, Terry L., 2001. "A Global Analysis Of Agricultural Trade Reform In Wto Member Countries," Bulletins 12984, University of Minnesota, Economic Development Center.
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