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Reducing Agriculture Tariffs Versus Domestic Support: What's More Important for Developing Countries?

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  • Hoekman, Bernard
  • Ng, Francis
  • Olarreaga, Marcelo

Abstract

High levels of protection and domestic support for farmers in developed countries significantly affect many least developed countries (LDCs), both directly and through the price-depressing effect of agricultural support policies. High tariffs and domestic support may also lower the world price of agricultural products, benefiting net importers. This Paper assesses the impact of reducing these distortionary policies for a sample of 119 countries. We find significant differences in the impact of a 50 percent cut in tariffs and a 50 cut in domestic support for LDCs as compared to non-LDC developing countries. However, for both groups of countries tariff reductions have a much greater positive effect on exports and welfare.

Suggested Citation

  • Hoekman, Bernard & Ng, Francis & Olarreaga, Marcelo, 2002. "Reducing Agriculture Tariffs Versus Domestic Support: What's More Important for Developing Countries?," CEPR Discussion Papers 3576, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3576
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    6. Joachim Zietz, 1986. "The potential benefits to LDCs of trade liberalization in beef and sugar by industrialized countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 122(1), pages 93-112, March.
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    Cited by:

    1. Porto, Guido G., 2003. "Trade reforms, market access, and poverty in Argentina," Policy Research Working Paper Series 3135, The World Bank.
    2. Dimaranan, Betina V. & Hertel, Thomas W. & Keeney, Roman, 2003. "OECD Domestic Support and the Developing Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22000, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Jales, Mário, 2010. "How Would A Trade Deal On Cotton Affect Exporting And Importing Countries?," WTO Doha Round 320115, International Centre for Trade and Sustainable Development (ICTSD).
    4. Mr. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 2003/110, International Monetary Fund.
    5. Bernard Hoekman & David Vines, 2007. "Multilateral trade cooperation: what next?," Oxford Review of Economic Policy, Oxford University Press, vol. 23(3), pages 311-334, Autumn.
    6. Margaret S. McMillan & Alix Peterson Zwane & Nava Ashraf, 2007. "My Policies or Yours: Does OECD Support for Agriculture Increase Poverty in Developing Countries?," NBER Chapters, in: Globalization and Poverty, pages 183-240, National Bureau of Economic Research, Inc.
    7. Ruben N. Lubowski & Andrew J. Plantinga & Robert N. Stavins, 2008. "What Drives Land-Use Change in the United States? A National Analysis of Landowner Decisions," Land Economics, University of Wisconsin Press, vol. 84(4), pages 529-550.
    8. James Scott & Rorden Wilkinson, 2012. "Changing of the guard: expert knowledge and ‘common sense’ in the Doha Development Agenda," Global Development Institute Working Paper Series 16612, GDI, The University of Manchester.
    9. Lionel Fontagné, 2003. "Market Access and Domestic Support Measures," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(3), pages 3-10, October.
    10. Andrew H. Charlton & Joseph E. Stiglitz, 2005. "A Development‐friendly Prioritisation of Doha Round Proposals," The World Economy, Wiley Blackwell, vol. 28(3), pages 293-312, March.
    11. Stephen Tokarick, 2005. "Who Bears the Cost of Agricultural Support in OECD Countries?," The World Economy, Wiley Blackwell, vol. 28(4), pages 573-593, April.
    12. Lionel Fontagné, 2003. "Market Access and Domestic Support Measures," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(03), pages 3-10, October.
    13. Perry, Santiago, 2008. "Tropical and Diversification Products: Strategic Options for Developing Countries," WTO Doha Round 320144, International Centre for Trade and Sustainable Development (ICTSD).
    14. BOUËT Antoine & FONTAGNE Lionel & MIMOUNI Mondher, 2010. "Direct Measure of Protection: a Rehabilitation," EcoMod2003 330700023, EcoMod.
    15. Samiul Haque & Kenneth A. Foster & Roman Keeney & Kathryn A. Boys & Badri G. Narayanan, 2019. "Output and input bias effects of U.S. direct payments," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 229-236, March.
    16. Acharya, Rohini & Daly, Michael, 2004. "Selected issues concerning the multilateral trading system," WTO Discussion Papers 7, World Trade Organization (WTO), Economic Research and Statistics Division.
    17. Valdes, Alberto & Foster, William E., 2006. "Latin America's "New Open Regionalism" and WTO Negotiations: the case of agriculture," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 6(12), pages 1-32.
    18. BOUËT Antoine & BUREAU Jean-Christophe & DECREUX Yvan & JEAN Sébastien, 2010. "Is Northern Agricultural Liberalization Beneficial to Developing Countries?," EcoMod2003 330700021, EcoMod.
    19. Aaditya Mattoo & Mr. Arvind Subramanian, 2003. "What Would a Development-Friendly WTO Architecture Really Look Like?," IMF Working Papers 2003/153, International Monetary Fund.
    20. 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.
    21. repec:unt:escsti:sti84 is not listed on IDEAS

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    More about this item

    Keywords

    agriculture trade; developing countries; subsidies; tariffs; trade negotiations; WTO;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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