In this study we use a multimarket model to evaluate the effects of free trade according to the agreements made at the Uruguay Round regarding free trade of agricultural products between Tunisia and the European Union. We present different trade policy experiments and we show the resulting changes in the goods prices and their supply and demand in Tunisia. Our results indicate that free trade policies reduce subsidies and thus create more efficiency in production. However it is shown that wheat production and consumption go down considerably if we totally suppress consumer subsidies. Intermediate steps are therefore recommended.
