Agricultural Policy and Trade Reform, Potential Effects at by OECD (Organisation for Economic Co-operation and

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Extra info for Agricultural Policy and Trade Reform, Potential Effects at Global, National and Household Levels

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OECD (2001) As compared to the standard GTAP model these enhancements result in a representation of agricultural supply that features a more considered treatment of agricultural factor specificity and substitution. Key technical characteristics of this modified version of GTAP, called GTAPEM, are described in the Annex to Part I. org/agr/reform/gtapem. The GTAP database contains all the information that would be needed to construct highly detailed CGE models for a long list of individual countries, regions, economic sectors and commodities.

Coverage of both agricultural trade policy and domestic programs is extensive in AGLINK. Trade policy coverage includes tariffs and export subsidies that drive a wedge between domestic and world market prices as well as tariff rate quotas that regulate quantities imported. g. programs of administered prices as well as programs of direct budgetary support to farmers. In the model domestic producer and market prices in each country are linked to their corresponding world market prices using price transmission equations.

Other studies factor in some other kinds of welfare gains. For example, the OECD (2003c) study includes gains from reducing trading costs (trade facilitation). Francois et al. (2001) include gains from services liberalization as well as some gains that result from assuming increasing returns to scale. 7 factor in some gains attributable to the impact of trade liberalisation and openness on productivity and economic growth. Finally, the World Bank (2003) and the Anderson et al. (2005) study produces larger apparent benefits from trade reform because the projected impacts refer to a future year, 2015, by which time the projected size of the world economy will have grown considerably.

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