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The challenge of Reducing Subsidies and Trade Barriers

Kym Anderson ()

No 2004-12, Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies

Abstract: Phasing out distortionary government subsidies and barriers to international trade will yield extraordinarily high benefits relative to any adjustment costs, notwithstanding the considerable reforms that have already taken place over the past two decades. This paper surveys recent estimates, using global economy-wide simulation models, of the benefits of reducing remaining distortions via unilateral reform, multilateral trade negotiations, and preferential trading arrangements. Distortionary trade policies harm most the economies imposing them, but the worst of them (in agriculture and clothing) are particularly harmful to the worldÂ’s poorest people. Opportunities to reduce remaining distortions, including via the WTOÂ’s Doha Development Agenda as compared with sub-global preferential reform, are examined, before drawing out the implications of liberalization for poverty and the environment.

Keywords: Trade policy reform; subsidy reduction; Doha Development Agenda. (search for similar items in EconPapers)
JEL-codes: F02 F13 F15 F17 (search for similar items in EconPapers)
Date: 2004-11
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