The economic and social consequences of agricultural export taxes: A CGE – analysis for Argentina

This paper contributes to the ongoing discussion about the domestic, economic and social consequences of taxing agricultural exports in Argentina. Nogues (2008) conducted a partial equilibrium analysis pointing out the negative consequences of export taxes for GDP, the unemployment rate and poverty. Cicowiez et al. (2009) used a CGE-model for the Argentinean economy, choosing 2005 as the base year, and showed that the elimination of export taxes on agricultural products had negative effects on GDP, unemployment and poverty. They argued that their results differed from Nogues (2008) because by using a CGE model they were taking into account the general equilibrium effects of the export taxes. Like Cicowiez et al. (2009), we used the static standard-CGE-model presented in Lofgren et al. (2002). Due to data availability problems we had to use the year 2000 as the base year. We simulated the implementation of the export tax structure of 2007, including the ad valorem equivalents of quantitative export restrictions. Our results tend to confirm those obtained by Nogues (2008). We show that the export taxes and quantitative export restrictions that were in place in 2007 have strong negative effects on overall GDP, unemployment and household welfare.