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

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  • Vaittinen, Risto

Abstract

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.

Suggested Citation

  • Vaittinen, Risto, 2003. "Liberalisation of Agricultural Trade - Global Implications and what it Means for the EU," Discussion Papers 303, VATT Institute for Economic Research.
  • Handle: RePEc:fer:dpaper:303
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    File URL: https://www.doria.fi/handle/10024/148284
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    References listed on IDEAS

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    1. W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 2000. "Decomposing Simulation Results with Respect to Exogenous Shocks," Computational Economics, Springer;Society for Computational Economics, vol. 15(3), pages 227-249, June.
    2. DeVuyst, Eric A. & Preckel, Paul V., 1997. "Sensitivity analysis revisited: A quadrature-based approach," Journal of Policy Modeling, Elsevier, vol. 19(2), pages 175-185, April.
    3. Josling, Timothy E. & Honma, Masayoshi & Lee, Jaeok & MacLaren, Donald & Miner, William M. & Sumner, Daniel A. & Tangermann, Stefan & Valdes, Alberto, 1994. "The Uruguay Round Agreement On Agriculture: An Evaluation," Commissioned Papers 14621, International Agricultural Trade Research Consortium.
    4. C. F. Bach & S. E. Frandsen & H. G. Jensen, 2000. "Agricultural and Economy-Wide Effects of European Enlargement: Modelling the Common Agricultural Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 162-180.
    5. Ingco, Merlinda D., 1995. "Agricultural trade liberalization in the Uruguay Round : one step forward, one step back?," Policy Research Working Paper Series 1500, The World Bank.
    6. Josling, Tim & Tangermann, Stefan, 1999. "Implementation of the WTO Agreement on Agriculture and Developments for the Next Round of Negotiations," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(3), pages 371-388, August.
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    Cited by:

    1. Kerkelä, Leena, 2004. "Distortion costs and effects of price liberalisation in Russian energy markets : A CGE analysis," BOFIT Discussion Papers 2/2004, Bank of Finland, Institute for Economies in Transition.

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