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The challenge of Reducing Subsidies and Trade Barriers


  • Kym Anderson

    () (World Bank)


Phasing out distortionary government subsidies and barriers to international trade will yield extraordinarily high benefits relative to any adjustment costs, notwithstanding the considerable reforms that have already taken place over the past two decades. This paper surveys recent estimates, using global economy-wide simulation models, of the benefits of reducing remaining distortions via unilateral reform, multilateral trade negotiations, and preferential trading arrangements. Distortionary trade policies harm most the economies imposing them, but the worst of them (in agriculture and clothing) are particularly harmful to the worldÂ’s poorest people. Opportunities to reduce remaining distortions, including via the WTOÂ’s Doha Development Agenda as compared with sub-global preferential reform, are examined, before drawing out the implications of liberalization for poverty and the environment.

Suggested Citation

  • Kym Anderson, 2004. "The challenge of Reducing Subsidies and Trade Barriers," Centre for International Economic Studies Working Papers 2004-12, University of Adelaide, Centre for International Economic Studies.
  • Handle: RePEc:adl:cieswp:2004-12

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    References listed on IDEAS

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    Cited by:

    1. Konov, Joshua Ioji / JK, 2013. "Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect," MPRA Paper 46950, University Library of Munich, Germany.
    2. Alvarez, Fernando & Lucas, Robert Jr., 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-1768, September.
    3. Jean-Christophe Bureau & Raja Chakir & Jacques Gallezot, 2007. "The Utilisation of Trade Preferences for Developing Countries in the Agri-food Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(2), pages 175-198, June.
    4. Gawel, Erik & Bernsen, Kristina, 2011. "What is wrong with virtual water trading?," UFZ Discussion Papers 1/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    5. Addison, Tony, 2005. "Post-Conflict Recovery: Does the Global Economy Work for Peace?," WIDER Working Paper Series DP2005/05, World Institute for Development Economic Research (UNU-WIDER).
    6. Jayatilleke S. Bandara, 2007. "The Effects of Agricultural Trade Liberalisation under the Doha Development Agenda with Special Reference to the Asia Pacific Region: A Brief Survey," Working Papers 3107, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    7. Addison, Tony, 2005. "Agricultural Development for Peace," WIDER Working Paper Series 007, World Institute for Development Economic Research (UNU-WIDER).
    8. Moshirian, Fariborz, 2005. "Global financial markets integration and Millennium Goals," Journal of Multinational Financial Management, Elsevier, vol. 15(4-5), pages 302-313, October.

    More about this item


    Trade policy reform; subsidy reduction; Doha Development Agenda.;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation


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