Liberalisation of Agricultural Trade - Global Implications and what it Means for the EU

The liberalisation of agricultural trade is expected to become a key element of the agreement resulting from the WTO's Doha Round. The economic impacts of agricultural trade liberalisation are evaluated in this study using a global numerical general equilibrium model. A broad policy package including the elimination of export subsidies, tariff reductions, and cuts in publicly financed domestic support is evaluated. World trade is expected to expand in liberalised commodities by between 10 and 25 per cent. Growth will be most pronounced in beef and sugar trade. Tariff reductions are the most important factor boosting trade. Middle-income countries, the EU, the transition economies of central Europe and other industrial countries, excluding the USA and Canada, are likely to benefit most from the reform. The efficiency gains as measured by fixed-price GDP will be from 0.1 to 0.3 per cent in these countries. Usually, consumption increases more because of declining food prices in food-importing countries or because of improved terms of trade in food-exporting countries.