DP5337 Do Global Trade Distortions Still Harm Developing Country Farmers?

Author(s): Kym Anderson , Ernesto Valenzuela

Publication Date: November 2005

Keyword(s): trade policy reform , CGE modeling , agricultural value added , economic welfare

JEL(s): C68 , D58 , F17 , Q17

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP5337.asp

We estimate the impact of global merchandise trade distortions and services regulations on agricultural value added in various countries. Using the latest versions of the GTAP database and the GTAP-AGR model of the global economy, our results suggest real net farm incomes would rise in developing countries with a move to free trade, thereby alleviating rural poverty - despite a terms of trade deterioration for developing countries that are net food importers or are enjoying preferential access to agricultural markets of high-income countries. We also show, for several large developing countries, the contribution of their own versus other countries' trade policies