Can Market Access Help African Agriculture?

Ben Hammouda, Hakim and Karingi, Stephen and Oulmane, Nassim and Lang, Rémi and Sadni Jallab, Mustapha (2006): Can Market Access Help African Agriculture?

Abstract

This paper examines the implications for African economies of the possible outcomes from the ongoing agriculture negotiations in the Doha Round. The paper defines scenarios that capture key elements of the modalities negotiations and undertakes simulations using a global dynamic general equilibrium model to examine the impact of multilateral agricultural trade reforms on African economies. The scenarios vary in their level of ambition in the market access pillar through both the level of tariff cuts in the different tiers and the level of sensitive sectors defined both for developed and developing economies. Results show that ambitious coefficients in the market access pillar remain the best outcome for Africa. Even what might seem to be an insignificant definition of sensitive products for developed countries erodes potential benefits from deep tariff cuts for African countries. This suggests that utilizing sensitive products tariff lines by developed countries not only dampens the expected positive outcomes for agriculture negotiations in favour of Africa but could also actually wipe out such gains. The results further confirm findings of other studies showing that tariff cuts for agricultural goods yield higher gains than elimination of subsidies, and this applies mainly to net food importing developing countries. Thus, reduction of subsidies should go hand-in-hand with agricultural tariff reductions in order to ensure win-win outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Agriculture in International Trade, Welfare Economics, Computable General Equilibrium, Models, Africa
• Subjects: N - Economic History > N5 - Agriculture, Natural Resources, Environment, and Extractive Industries > N57 - Africa ; Oceania; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade; D - Microeconomics > D6 - Welfare Economics > D60 - General

References

Anderson K, B. Hoekman, and A.Strutt. 1999. “Agriculture and the WTO: Next steps”.CIES Discussion Paper 99/14, University of Adelaide, Australia

Anderson K., Betina Dimaranan, Joseph Francois, Thomas Hertel, Bernard Hoekman and Will Martin.2001.”The cost of rich (and Poor) Country Protection to developing countries”. Journal of African Economies 10(3):222-57

Elbehri, A., and S.Leetma.2002.”How significant are export subsidies to agricultural trade? Trade and welfare implications of Global Reforms”, Paper presented at the 5th Annual Conference on Global Economic Analysis, June, Taipei.

Elbehri, A., M.D.Ingco, T.W.Hertel, and K.Pearson.1999. “Agriculture and WTO 2000: Quantitative Assesment of Multilateral Liberalization of Agricultural Policy”. Paper presented at the WTO/World Bank conference on Agriculture and the new Trade Agenda in the WTO 2000 Negotiations. October, Geneva.

Gibson, P.,J.Wainio, D.Whitley, and M.Bohman.2001.Profiles of tariffs in Global Agricultural Markets. Agricultural Economic report 796.U.S.D.A., Economic Research Service, Washington, D.C.

Hertel, Thomas, and Will Martin.2000.”Liberalizing Agriculture and manufactures in a Millenium Round: Implications for developing countries”, World Economy 23: 445-70

Johnston, Bruce F., and John W.Mellor. 1961.”The role of Agriculture in Economic Development”, American Economic Review:51(4): 566-93

McCulloch, N.,A.Winters, and X.Cirera. 2001.Trade liberalization and poverty: A Handbook. London: Center for Economic Policy Research