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How Significant Are Export Subsidies To Agricultural Trade? Trade And Welfare Implications Of Global Reforms

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  • Elbehri, Aziz
  • Leetmaa, Susan E.

Abstract

We analyze the impacts of removing export subsidies with or without reforms to domestic support and tariffs using a multi-country trade model. Model simulations are designed to assess both the magnitude and the direction of trade in the absence of export subsidies in connection with other domestic distortions and import barriers. Results show that the impacts of export subsidy removal, while significant for some countries and products, are comparatively smaller and are dominated by the much larger trade and welfare distortions imposed by import barriers. Hence, the removal of domestic subsidies, including export subsidies, by themselves may not be sufficient to improve global welfare and expand trade since the welfare gains by the net exporters are far outweighed by the losses of net importers. One implication from these simulations is that export subsidy reform must be combined with market access liberalization in order to benefit exporters and importers and to attract the widest support among WTO members.

Suggested Citation

  • Elbehri, Aziz & Leetmaa, Susan E., 2001. "How Significant Are Export Subsidies To Agricultural Trade? Trade And Welfare Implications Of Global Reforms," 2001 Annual meeting, August 5-8, Chicago, IL 20518, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20518
    DOI: 10.22004/ag.econ.20518
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    References listed on IDEAS

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    3. Huff, Karen & Thomas W. Hertel, 2001. "Decomposing Welfare Changes in GTAP," GTAP Technical Papers 308, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    Cited by:

    1. Alexandre Gohin & Patrice Gautier, 2008. "The phasing out of EU agricultural export subsidies : impacts of TWO management schemes," Working Papers hal-01931642, HAL.
    2. Hayes-Labruto, Leslie & Schillebeeckx, Simon J.D. & Workman, Mark & Shah, Nilay, 2013. "Contrasting perspectives on China's rare earths policies: Reframing the debate through a stakeholder lens," Energy Policy, Elsevier, vol. 63(C), pages 55-68.

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