February 22, 2017

Agricultural Policy and Trade Reform, Potential Effects at by OECD (Organisation for Economic Co-operation and

By OECD (Organisation for Economic Co-operation and Development)

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Extra info for Agricultural Policy and Trade Reform, Potential Effects at Global, National and Household Levels

Example text

First, the model is used to generate a baseline projection of annual commodity supply, demand and prices for projection horizons typically extending for up to ten years into the future. This baseline embodies assumed values for a wide range of exogenous variables, including those relating to the settings of key agricultural trade and domestic policy parameters. An AGRICULTURAL POLICY AND TRADE REFORM: POTENTIAL EFFECTS AT GLOBAL, NATIONAL AND HOUSEHOLD LEVELS – ISBN-92-64-02573-1 © OECD 2006 Chapter 2.

First, since products are assumed to differ according to country of origin, each country has, in effect, the potential to gain welfare by imposing an optimal export tax or import tariff, even if the country in question might be considered in the usual economic sense of the term too small to have any influence on the market prices of products it sells or buys on world markets (Tokarick, 2005). Second, because of the way the assumption is implemented in the model, there is no possibility that a country can switch from being an importer to an exporter in consequence of a policy change (nor can trade occur if there is zero trade in the base period).

8 billion benefits for the entire non-OECD region accrues to just one country – Brazil. Indeed, as might be expected for countries that are net importers of OECD agricultural products, some countries would lose welfare from reform confined just to reductions in OECD agriculture protection and support. Most individual non-OECD countries singled out in the GTAPEM analysis are shown to gain. However, apart from Brazil, the welfare changes attributed to OECD agricultural policy reforms are, whether positive or negative, relatively small.

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