@article{Kerkela:331480,
      recid = {331480},
      author = {Kerkela, Leena and Lehtonen, Heikki and Niemi, Jyrki},
      title = {Effects of WTO export subsidy abolition and tariff rate  reduction on agriculture on global and national level},
      address = {2006},
      pages = {19},
      year = {2006},
      note = {Presented at the 9th Annual Conference on Global Economic  Analysis, Addis Ababa, Ethiopia},
      abstract = {Commitments by the EU in multilateral trade negotiations  have diverse effects on the member countries and especially  their prospects in agricultural production. Each of the  details in the current agricultural negotiations within the  WTO have an impact on country level production  possibilities and this raises a real interest for single  farmers and their representatives to get information on the  transmittance of global commitments to national decision  making, either in production possibilities or support  programmes. GTAP framework is a well-known approach in the  analysis of global trade liberalisation. Changes in world  market prices have repercussions on national production and  consumption decisions thus producing a new equilibrium with  altered production and consumption patterns. Considering  agriculture and use of agricultural land, the consequences  of changing trade flows and product prices, as well as  consequences of possibly changing support levels for  agriculture, are important to be analysed also at national  and regional level. The DREMFIA sector model (Lehtonen  2001) is utilised to investigate the medium-term impacts of  the policy changes in production, input use, incomes, and  structure of Finnish agricultural sector. The model is  disaggregated in 4 main regions and 18 smaller regions  which facilitate a very detailed representation of  agricultural policy and use of region specific information  of agricultural production. Relevant EU level price  changes, which are exogenous in the DREMFIA model, are  derived from the GTAP model. In this paper some of the  scenarios in the WTO negotiations are taken as examples of  international commitments whose effects are studied on the  national level. We rely mostly on the commitment in  December 2005 Ministerial meeting where the WTO members  engaged in removing agricultural export subsidies by 2013.  This scenario has bee also analysed in isolation from other  negotiation chapters in our previous paper (Kerkelä,  Lehtonen and Niemi 2005). Apart from that we shortly  include one of the tariff reduction scenarios into the  analysis. Both the tariff cuts as well as export subsidy  abolition show decreasing prices and production for the EU  members in agricultural production. Giving these price  decreases as shocks to Dremfia model give negative output  responses exceeding those of coming from the GTAP model.  Still, the drastic output decline is dampened when short  run and long run price effects are taken separately to the  Dremfia model.},
      url = {http://ageconsearch.umn.edu/record/331480},
}