This page contains a Flash digital edition of a book.
48 CHAPTER 3


would increase by over 2 percent for sugar, 3 percent for rice, and nearly 5 percent for dairy products.5 Plant-based fibers (including cotton) and wheat would experience the largest increases, 7 and 11 percent, respectively. Smaller increases are expected if more recent versions of the databases are used, reflecting a more open world in 2004 than in 2001.


Other studies have also shown that the removal of all distortions (full lib- eralization) would lead to increases in wheat prices ranging from 4.8 percent (FAPRI 2002) to 18.1 percent (USDA 2001). The contribution of domestic sup- port to changes in world prices from trade liberalization is illustrated in FAPRI (2002), which shows that the increase in wheat prices would be 7.6 percent higher under a tariff-removal-only scenario than under a full liberalization scenario, implying that the removal of domestic support policies such as set- aside programs in the E.U. and the United States would result in a substantial increase in production and exports (7.9 percent compared to 5 percent under the tariff-removal-only scenario), dampening the price effect. But USDA (2001) shows that the increase in wheat prices of 12 percent resulting from the elimination of OECD domestic policies, mostly reflecting market price support, would be larger than the price increase of 3.4 percent resulting from the elimination of tariffs.


The results of small increase in rice prices seen in Bouët (2008) are similar to the results found in Tokarick (2005) but much smaller than the USDA (2001) estimates of 10 percent. Wailes (2004), using a partial equilibrium model on a highly disaggregated sector by type of rice, estimates that full trade liberal- ization would increase the price of long-grain rice by 2 percent, on average, and that of medium- and short-grain rice by a full 90 percent. Much as in the case of wheat, removal of domestic support policies for sugar and cotton would have a greater impact on price increases than just the removal of border restrictions. The removal of trade restrictions alone for sugar would result in a smaller price increase, 27 percent, than if liberaliza- tion included the removal of all production support: the world price would then rise to 48 percent compared to the base scenario (El-Obeid and Beghin 2005). Removing import restrictions on textiles and clothing would indepen- dently raise cotton prices by 2 percent (CIE 2001), while removing U.S. cotton subsidies was estimated to have resulted in increasing the world price by 20 percent in 2001/02, and removing all cotton subsidies worldwide would have raised the world price by over 50 percent (ICAC 2002).


5 It should be noted that the price of a commodity in MIRAGE reflects a weighted average of export prices across countries and therefore is highly dependent on the geographic decomposi- tion selected for a particular study. In the case of rice, the inclusion of high-tariff countries, such as Japan and Korea, as single countries instead of as part of a larger region may reverse the direction of world price changes in rice.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164  |  Page 165  |  Page 166  |  Page 167  |  Page 168  |  Page 169  |  Page 170  |  Page 171  |  Page 172  |  Page 173  |  Page 174  |  Page 175  |  Page 176  |  Page 177  |  Page 178  |  Page 179  |  Page 180  |  Page 181  |  Page 182  |  Page 183  |  Page 184  |  Page 185  |  Page 186  |  Page 187  |  Page 188  |  Page 189  |  Page 190  |  Page 191  |  Page 192  |  Page 193  |  Page 194  |  Page 195  |  Page 196  |  Page 197  |  Page 198  |  Page 199  |  Page 200  |  Page 201  |  Page 202  |  Page 203  |  Page 204  |  Page 205  |  Page 206  |  Page 207  |  Page 208  |  Page 209  |  Page 210  |  Page 211  |  Page 212  |  Page 213  |  Page 214  |  Page 215  |  Page 216  |  Page 217  |  Page 218  |  Page 219  |  Page 220  |  Page 221  |  Page 222  |  Page 223  |  Page 224  |  Page 225  |  Page 226  |  Page 227  |  Page 228  |  Page 229  |  Page 230  |  Page 231  |  Page 232  |  Page 233  |  Page 234  |  Page 235  |  Page 236  |  Page 237  |  Page 238  |  Page 239  |  Page 240  |  Page 241  |  Page 242  |  Page 243  |  Page 244  |  Page 245  |  Page 246  |  Page 247  |  Page 248  |  Page 249  |  Page 250  |  Page 251  |  Page 252