Tariff protection elimination and Common Agricultural Policy reform: implications of changes in methods of import demand modelling
Abstract:The study proposes a way for accommodating the traditional Armington assumption to capture the possibility for a country to import imperfect substitutes as well as perfect substitutes for domestically produced goods. When this possibility is incorporated into a modelling framework, then a Common Agricultural Policy elimination scenario, including the setting to zero of import tariffs, would have starker implications than many studies suggest. To illustrate this point, a Computable General Equilibrium (CGE) model of the French economy is used, highlighting agricultural and food sectors. The study analyses the consequences for the French economy of a complete liberalization scenario in the European sector of cereals.
Document Type: Research Article
Affiliations: INRA–ESR, 4 allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex, France
Publication date: July 20, 2006