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Third-Country Effects and Second-Best Grain Trade Policies: Export Subsidies and Bilateral Liberalization

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  • Richard Gray

Abstract

An incumbent export subsidy will affect the size and distribution of gains from bilateral trade liberalization but, in theory, may still permit increased trade volume and mutual benefits from freer trade. These points are illustrated using the case of Canada-U.S. durum wheat trade, which grew rapidly following the 1989 Canadian-U.S. Free Trade Agreement (CUSTA). An empirical analysis suggests that, given its Export Enhancement Program (EEP), the United States lost from freer trade in durum. Conversely, freer trade in durum means greater gains to the United States from eliminating EEP. Copyright 1997, Oxford University Press.

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  • Richard Gray, 1997. "Third-Country Effects and Second-Best Grain Trade Policies: Export Subsidies and Bilateral Liberalization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1300-1310.
    • Handle: RePEc:oup:ajagec:v:79:y:1997:i:4:p:1300-1310
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    File URL: http://hdl.handle.net/10.2307/1244286
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    Cited by:

    1. Klein, Kurt K. & Storey, Gary, 1998. "Structural Developments In The Canadian Grains And Oilseeds Sector," Proceedings of the 4th Agricultural and Food Policy Systems Information Workshop 1998: Economic Harmonization in the Canadian\U.S.\Mexican Grain-Livestock Subsector; 16758, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
    2. Sumner, Daniel A., 2000. "Opening Global Markets For Agriculture: The Next Wto Round," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 18(1), pages 1-12, March.
    3. Rude, James, 2012. "Abstinence and the Single Desk: Canada – US Wheat Trade Relations in a post-CWB World," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 13(2), pages 1-23, July.
    4. Alston, Julian M. & Gray, Richard S. & Sumner, Daniel A., 2001. "Wheat Disputes Under Nafta," Proceedings of the 6th Agricultural and Food Policy Systems Information Workshop, 2000: Trade Liberalization Under NAFTA: Report Card on Agriculture 16842, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.

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