Abstract
We use the Mercantilist Trade Restrictiveness Index (MTRI) to develop an extended index that measures the overall trade effects of domestic support payments in a general equilibrium framework environment. Our index is capable of analyzing the development of the trade restrictiveness of domestic support payments over time and across countries and of comparing these payments with other protection instruments. Furthermore, our index helps evaluate agricultural policy reforms that introduce changes into the composition of domestic support payments. We conduct this analysis with an extended version of the GTAP model and database using the EU as an example. Thus, we incorporate detailed EU domestic support payments taken from the OECD Producer Support Estimate (PSE) tables in the GTAP framework and reconcile PSE data with the WTO classification scheme. Although our index slightly increases from 2004 to 2007, the results indicate a decrease in trade distortion stemming from the implementation of decoupled support in the EU. The trade-equivalent protection rate determined under the index shows that domestic support payments restrict trade more than tariffs and export subsidies. Additionally, the index indicates that reducing WTO amber box domestic support payments would lead to decreased trade restrictiveness.
| Original language | English |
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| Publication date | 2015 |
| Number of pages | 36 |
| Publication status | Published - 2015 |
| Event | 18th Annual Cofenerence on Global Economic Analysis - Melbourne Convention Centre Level 1 1 Convention Centre Place South Wharf VIC 3006 Australia , Melbourne, Australia Duration: 17 Jun 2015 → 19 Jun 2015 |
Conference
| Conference | 18th Annual Cofenerence on Global Economic Analysis |
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| Location | Melbourne Convention Centre Level 1 1 Convention Centre Place South Wharf VIC 3006 Australia |
| Country/Territory | Australia |
| City | Melbourne |
| Period | 17/06/2015 → 19/06/2015 |