The Challenge of Reducing Subsidies and Trade Barriers

59 Pages Posted: 20 Apr 2016

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Multiple version iconThere are 2 versions of this paper

Date Written: September 22, 2004

Abstract

This is one of 10 studies for the Copenhagen Consensus Project that sought to evaluate the most feasible opportunities to improve welfare globally and alleviate poverty in developing countries. Anderson argues that phasing out distortionary government subsidies and barriers to international trade will yield an extraordinarily high benefit-cost ratio. A survey is provided of recent estimates using global economywide simulation models of the benefits of doing that by way of the current Doha round of multilateral trade negotiations. Even if adjustment costs are several times as large as suggested by available estimates, the benefit-cost ratio from seizing this opportunity exceeds 20. That is much higher than the rewards from regional or bilateral trade agreements or from providing preferential access for least-developed countries' exports to high-income countries. Such reform would simultaneously contribute to alleviating several of the other key challenges reflected in the United Nation's Millennium Development Goals.

This paper - a product of the Trade Team, Development Research Group - is part of a larger effort in the group to better understand the likely consequences of further trade liberalization for global economic welfare and its distributional effects, particularly for the poor in developing countries.

Keywords: trade policy reform, subsidy reduction, Doha Development Agenda

JEL Classification: F02, F13, F15, F17

Suggested Citation

Anderson, Kym, The Challenge of Reducing Subsidies and Trade Barriers (September 22, 2004). Available at SSRN: https://ssrn.com/abstract=625292

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

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