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The Current Round of Agricultural Trade Negotiations: Should We Bother About Domestic Support?

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  • Rae, Allan N.
  • Strutt, Anna

Abstract

The current WTO agricultural trade negotiations began in March 2000 and became part of the Doha Development Agenda in late 2001. The previous Uruguay Round reached agricultural agreements in the areas of market access, export competition and domestic support. The current round is seeking agreements under similar headings. The effort to reach agreement over reductions in domestic support to farmers is complicated by a number of factors,for example, the extent to which such support affects production decisions, the wishes of governments to support farmers for pursuing multifunctional outcomes from agriculture, and the categorisation of a myriad of policy instruments into green, blue and amber boxes. These complications pose the risk of considerably extending the negotiations and diverting attention away from other areas of reform. But the sustainability of many domestic support policies depends on trade barriers, and reform of these trade barriers may force governments into reforming domestic support without requiring specific international agreements. We use the GTAP applied general equilibrium model to quantify and analyse a number of trade reform scenarios, with and without specific changes in domestic support. We conclude that substantial trade expansion and welfare gains can be achieved, even when domestic support is excluded from the multilateral agreement. Improved market access makes a far greater contribution to welfare gains than do reforms to domestic policies, and once substantive reforms to border policies have been achieved attention can then be turned to the lower-priority task of reforming domestic support.

Suggested Citation

  • Rae, Allan N. & Strutt, Anna, 2003. "The Current Round of Agricultural Trade Negotiations: Should We Bother About Domestic Support?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(2).
  • Handle: RePEc:ags:ecjilt:23881
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    File URL: http://purl.umn.edu/23881
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    References listed on IDEAS

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    1. James Rude, 2000. "An Examination of Nearly Green Programs: Case Study for Canada," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 755-761.
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    Citations

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    Cited by:

    1. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    2. Dimaranan, Betina & Hertel, Thomas & Keeney, Roman, 2003. "OECD Domestic Support and Developing Countries," WIDER Working Paper Series 032, World Institute for Development Economic Research (UNU-WIDER).
    3. Hoekman, Bernanrd & Ng, Francis & Olarreaga, Marcelo, 2003. "Reducing agrcultural tariffs versus domestic support : what's more important for developing countries?," Policy Research Working Paper Series 2918, The World Bank.
    4. BOUËT Antoine & BUREAU Jean-Christophe & DECREUX Yvan & JEAN Sébastien, "undated". "Is Northern Agricultural Liberalization Beneficial to Developing Countries?," EcoMod2003 330700021, EcoMod.
    5. Shakur, Shamim & Rae, Allan N. & Chatterjee, Srikanta, 2004. "A Road Ahead From Cancun? Weighing Up Some Give-And-Take Scenarios In A Dda Spirit," Discussion Papers 23709, Massey University, Department of Applied and International Economics.
    6. Anderson, Kym, 2004. "The challenge of reducing subsidies and trade barriers," Policy Research Working Paper Series 3415, The World Bank.
    7. Antimiani, Alessandro & Conforti, Piero & Salvatici, Luca, 2005. "Alternative Market Access Scenarios in the Agriculture Trade Negotiations of the Doha Round," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(2).
    8. Urban, Kirsten & Jensen, Hans G. & Brockmeier, Martina, 2016. "How decoupled is the Single Farm Payment and does it matter for international trade?," Food Policy, Elsevier, vol. 59(C), pages 126-138.
    9. Yang, Jun & Huang, Jikun & Li, Ninghui & Rozelle, Scott & Martin, Will, 2011. "The impact of the Doha trade proposals on farmers' incomes in China," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 439-452, May.

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