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Multifunctionality and Agricultural Trade Negotiations

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  • Philip L. Paarlberg
  • Maury Bredahl
  • John G. Lee

Abstract

Differing views of multifunctionality—attributing nonmarket benefits to agricultural production—continue to be an obstacle in World Trade Organization (WTO) negotiations. Some nations see multifunctionality as justifying subsidies to agricultural production; others see it as disguised protection. This paper shows that while multifunctionality never justifies trade interventions, it can justify production subsidies or taxes. Recognizing that the subsidies or taxes can be economically efficient policies, nations must precisely define and value the externalities in order to design policies and defend those interventions in the WTO. Trade rules are developed that accommodate domestic policy intervention while preventing disguised protection.

Suggested Citation

  • Philip L. Paarlberg & Maury Bredahl & John G. Lee, 2002. "Multifunctionality and Agricultural Trade Negotiations," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 322-335.
    • Handle: RePEc:oup:revage:v:24:y:2002:i:2:p:322-335.
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    References listed on IDEAS

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