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Abstract
With the prospect of greater uncertainty in world markets, additional progress will be required to
minimize the adverse effects of domestic support policies on international trade; otherwise, turbulent global
economic conditions will generate even greater uncertainty and instability in world commodity markets. To obtain
greater rattonalization of agricultural production and trade, improved empirical measures of the impacts of
alternative domestic support programmes on international trade in farm products are required. Previous studies
based on rates of protection have not adequately identified the effects of protection. An alternative concept-the
"rate of distortmn" of world market prices-is developed in this paper to provide an improved measure of the
impact of agricultural policy measures and to provide a more meaningful basis for future trade negotiations. The
case example of wheat 1s used to Illustrate the potential benefits of such a new concept. In order to identify a
balanced reduction in the effects of protection on international markets, evaluating rates of distortion is preferable
to analyzing the impacts of a proportional change in rates of protection undertaken by all countries.