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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.

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Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2004-12.

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Length: 42 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:adl:cieswp:2004-12
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