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EC Enlargement and Trade Liberalization in the Vegetable Oils Market

Author

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  • Croci-Angelini, Elisabetta
  • Tarditi, Secondo

Abstract

The third EC enlargement to include Spain and Portugal raised substantial problems in the international olive oil market, where the EC-10 accounted for 48 percent of production and 52 percent of consumption and the new EC members for 30 percent and 24 percent, respectively. Olive oil was highly supported in the EC-10, where producer prices were more than twice the international prices. Extending (from 1986 to 1991) the EC-10 price support to Spanish and Portuguese producers would have meant huge EC-12 budgetary costs and a complete price collapse of the tiny world market. This paper presents three simulations of the world market by means of a multi-product and multiregional price equilibrium model of the oils and fats sector: (1) the impact of the EC enlargement to include Spain and Portugal without CAP changes; (2) the impact of the EC-12 offer in the GATT negotiations implying a 30-percent decrease in domestic support for olive oil, butter, animal fats, and a 6-percent import tariff for oilseeds and other vegetable oils; and (3) the decrease in the producer price support of olive oil that would be needed to offset the impact of enlargement on the EC-12 trade balance.

Suggested Citation

  • Croci-Angelini, Elisabetta & Tarditi, Secondo, 1992. "EC Enlargement and Trade Liberalization in the Vegetable Oils Market," 1992 Occasional Paper Series No. 6 197734, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaaeo6:197734
    DOI: 10.22004/ag.econ.197734
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