State Trading Enterprises as an Impediment to Improved Market Access: The Case of the Korean Rice Market

13 Pages Posted: 14 Jul 2008

See all articles by Donald MacLaren

Donald MacLaren

University of Melbourne - Department of Economics

Abstract

The trade and welfare effects of tariffs are well known. Less well known, and more difficult to analyze, are the economic effects of state trading enterprises (STEs). Despite STEs in importing countries having the potential to limit market access, they are no longer on the agriculture agenda in the Doha Round Negotiations in the WTO, because some Members have asserted that importing STEs do not distort international trade. We evaluate this assertion through the use of a theoretical model of an STE, which is calibrated to data for the Korean rice market. We show that this STE does distort international trade by restricting market access relative to a Cournot benchmark, and that it affects the domestic and international distribution of social welfare. This finding permits the conclusion that an important opportunity is being missed in the negotiations to improve market access, because importing STEs are not on the agenda.

Suggested Citation

MacLaren, Donald, State Trading Enterprises as an Impediment to Improved Market Access: The Case of the Korean Rice Market. Review of International Economics, Vol. 16, No. 3, pp. 431-443, August 2008. Available at SSRN: https://ssrn.com/abstract=1158793 or http://dx.doi.org/10.1111/j.1467-9396.2007.00713.x

Donald MacLaren

University of Melbourne - Department of Economics ( email )

Victoria 3010, 3010
Australia
(61) 3 8344-5035 (Phone)
(61) 3 8344-6899 (Fax)

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