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How Would Global Trade Liberalization Affect Rural and Regional Incomes in Australia

  • Kym Anderson

    ()

    (School of Economics, University of Adelaide)

  • James Giesecke

    ()

    (Monash University)

  • Ernesto Valenzuela

    ()

    (School of Economics, University of Adelaide)

Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on Australia's terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing, and OPEC has been keeping up prices of energy raw materials. To what extent are Australian farmers and rural regions still adversely affected by farm and non-farm price-distortive policies abroad? This paper draws on new evidence on the current extent of those domestic and foreign distortions first to model their net impact on Australia's terms of trade (TOT, using the World Bank's Linkage model of the global economy), and second to model the effects of that TOT impact on rural vs urban and other regions and households within Australia as of 2004 (using Monash's multi-regional TERM model of the Australian economy). The results vindicate the continuing push by Australia's rural communities for multilateral agricultural trade liberalization.

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2009-09.pdf
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Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2009-09.

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Length: 42 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:adl:wpaper:2009-09
Contact details of provider: Postal: Adelaide SA 5005
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/

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  1. van der Mensbrugghe, Dominique & Valenzuela, Ernesto & Anderson, Kym, 2009. "Border Price and Export Demand Shocks for Developing Countries from Rest-of-World Trade Liberalization Using the Linkage Model," Agricultural Distortions Working Paper 52797, World Bank.
  2. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611.
  3. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
  4. Anderson, Kym & Lloyd, Peter & MacLaren, Donald, 2008. "Distortions to agricultural incentives in Australia since world war II," Policy Research Working Paper Series 4471, The World Bank.
  5. Mark Horridge & Glyn Wittwer, 2008. "Creating and managing an impossibly large CGE database that is up-to-date," Centre of Policy Studies/IMPACT Centre Working Papers g-175, Victoria University, Centre of Policy Studies/IMPACT Centre.
  6. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2008. "Distortions to Agricultural Incentives in Australia and New Zealand," Agricultural Distortions Working Paper 48387, World Bank.
  7. Gardner, Bruce L., 2008. "Distortions to Agricultural Incentives in the United States and Canada," Agricultural Distortions Working Paper 48573, World Bank.
  8. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436.
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