2004年-世界发展银行全球_Agricultural_Tariffs_or_Subsidies___Which_Are_More_Important_for_Developing_Economies__30页_216kb

Summary of "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?"

Core Content

This article by Bernard Hoekman, Francis Ng, and Marcelo Olarreaga evaluates the relative importance of agricultural tariffs and subsidies in shaping the trade and welfare outcomes of developing economies. It uses a partial equilibrium model to estimate the effects of policy changes on world prices, exports, imports, and welfare, focusing on 144 countries, 120 of which are developing.

Main Points

1. Impact of Agricultural Subsidies and Tariffs on Developing Economies

• Tariffs have a more significant impact on world prices and welfare than domestic support or export subsidies.
• A 50% reduction in tariffs would lead to a larger positive effect on developing economies' exports and welfare compared to a similar reduction in subsidies.
• High tariffs and domestic support in OECD countries depress world prices, which negatively affects developing economies' export competitiveness and welfare.
• Net importers may benefit from lower prices due to subsidies, but this is offset by price volatility and trade pattern distortions.

2. Distribution of Agricultural Support and Subsidies

• Domestic support is heavily concentrated in OECD countries, particularly in the Quad group (Canada, EU, Japan, and US), which account for over 99% of world support in several key agricultural products.
• Export subsidies are also concentrated, mainly in meat, dairy, cereals, and sugar, which together account for 80% of all export subsidies.
• Developing economies account for 12% of total domestic support and 0.5% of export subsidies.
• Least developed countries (LDCs) report no direct domestic support, but their exports are heavily affected by subsidies and tariffs from other countries.

3. Effects on Exports and Imports

• Developing economies are more affected by tariffs and subsidies on their exports and imports due to their limited market power and high dependence on global prices.
• LDCs are particularly vulnerable, as 60-85% of their exports are subject to subsidies or tariffs.
• Net importers may benefit from lower prices but face price volatility and distortions.

4. Analytical Framework

• A partial equilibrium model is used to estimate the impact of tariffs, domestic support, and export subsidies on world prices, export revenue, import revenue, and welfare.
• The model assumes perfect competition and homogeneous products within the same HS classification.
• The elasticities of import and export demand/supply are estimated directly from disaggregated trade data.

5. Empirical Methodology

• The empirical approach involves three steps:
  1. Estimating import demand and export supply elasticities.
  2. Calibrating demand and supply parameters for each country and product.
  3. Simulating the effects of a 50% reduction in tariffs, domestic support, or export subsidies on world prices and welfare.
• Unit values are normalized to 1 to simplify the estimation of world prices.
• Transport costs are approximated by the ratio of export and import unit values.
• Elasticities with respect to domestic support are assumed to be equal for import and export supply.
• A between estimator is used due to the unbalanced nature of the data.

Key Findings

• Tariffs have a larger impact on world prices and welfare than subsidies.
• Domestic support has a smaller effect on world prices compared to tariffs, and its overall impact is limited due to its small magnitude.
• Export subsidies have a larger elasticity than domestic support, but their overall impact is relatively small due to their limited scale.
• Developing economies are more affected by tariffs and subsidies on their agricultural exports and imports.
• Least developed economies are the most vulnerable, as a large proportion of their exports are subject to subsidies and tariffs.

Conclusion

The study suggests that reducing border protection (tariffs) should be a priority in the Doha Round negotiations, as it leads to greater welfare gains for developing economies than reducing subsidies. While subsidies do have an impact, their effect is smaller in magnitude and less significant in terms of price distortion and welfare outcomes. The partial equilibrium model provides a practical tool for assessing the effects of agricultural policies on trade and welfare in a large set of countries.