The Food and Agriculture Program at the Institute of Applied Systems Analysis has over a number of years developed a large global model system with the purpose of studying agricultural policy issues. This article reports on preliminary findings of the economic and welfare effects of a general introduction of free trade. At free trade world market prices rise by 20 to 25 percent, as the downward pressure on these prices of protection is released. This triggers economic gains, particularly for developing countries and lowly protected developed countries, and a considerable expansion of world trade, particularly in animal products. Globa! welfare improves, but the poorest layers of the population in developing countries may suffer from the higher prices.
