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

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  • Olarreaga, Marcelo
  • Ng, Francis

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

  • Olarreaga, Marcelo & Ng, Francis, 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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    References listed on IDEAS

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    More about this item

    Keywords

    Agriculture trade; Wto; Trade negotiations; Tariffs; Subsidies; Developing countries;
    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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