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Abstract

A great deal of attention is currently being paid to the discussion of the reform of global agricultural trade. In this paper, the effects of the revised Harbinson paper (March 2003) are analysed with an extensively extended GTAP model. With the help of a base run, projections are implemented in the form of economic developments as well as already enacted EU policy reforms and measures (Agenda 2000, Mid-Term Review, EU enlargement, EBA agreement) from 1997 to 2014. The base run is compared with a scenario simulating the Doha Round of the WTO based on the revised draft of the Harbinson proposal. The difference between the base run and the model scenario provides information on the effects on EU trade and budget. The revised Harbinson paper leads to a particularly negative development in the trade balances and production quantities for the agricultural and food sectors of the EU-27, which are supported with high import duties, export subsidies and direct payments. Significant effects could be seen particularly in the cases processed food, beef, fruits and vegetables, other cereals and oils and fats. A decomposition of the total effects of the implementation of the Harbinson paper provides detailed insights in the effects resulting from the changes in the complex protection structure of the CAP. The implementation of the Doha Round of the WTO negotiations leads to a reduction in expenses for agricultural market policy of the CAP, caused especially by the production related reduction in direct payments and the complete dismantling of export subsidies.

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