Expected effects from partially lifting tariff barriers on the Mexican agricultural sector are investigated using a restricted profit function (RPF) approach. Short-run and intermediate-run effects of the implementation of GATT minimum tariff provisions on Mexican agricultural trade are examined. Specification tests reveal the appropriateness of the RPF approach, that exports should not be aggregated with non-traded production into a single output, and that the farm sector behaves as an 'almost' price-taking, profit-maximizing firm. Policy simulations suggest important short-run changes in agricultural trade and chemical use and intermediate-run changes in agricultural trade, labour wage, chemical use, capital investments, and net farm income.
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Document Type: Research Article
Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843-2124
American Express, 20022 N. 31St Avenue, Mail Drop 08 03 28, Phoenix, AZ 85027
Department of Agricultural and Resource Economics, Washington State University, Pullman, Washington 99164-6210
Publication date: 2003-01-01
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