Production, Consumption and Welfare Implications of Trade Liberalisation: The Case of Greek Agriculture

Chrysostomos E. Stoforos

Agricultural Economics Review, 2003, vol. 04, issue 1

Abstract: The main facts lying behind this paper are related to the current issues regarding EU policies; such as the accession of a number of Central and Eastern European Countries (CEECs) in the EU and the Doha round of the World Trade Organisation. The adopted quantitative methodology aims to estimate the expected trends in Greek agriculture following a substantial reduction in the level of protection over the 1999-2008 period. Two scenarios are examined: a baseline that simulates continuation of present agricultural policies, and one that assumes trade liberalisation. Trade liberalization has as an immediate negative effect on production, while a positive effect is true for demand. Welfare analysis results suggest a significant negative effect in producer surplus, but an overall positive trend for the net welfare effect in the case of the trade liberalisation scenario. Hence, from the efficiency point of view, the reallocation of resources through trade liberalisation is beneficial, if proper strategies are adopted to avoid additional costs due to market imperfections.

Keywords: International Relations/Trade (search for similar items in EconPapers)
Date: 2003
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