Gainers and Losers from Agricultural Trade Liberalization*

Abstract

We know from elementary trade theory that liberalization yields net gains and has distributional consequences. Computable general equilibrium models allow these impacts to be addressed in detail and the policy debate around the Doha Round WTO negotiations has created demand for such analysis. The three interesting case studies presented in this session illustrate the promise and pitfalls that arise in meeting this challenge. The authors face the difficult task of briefly describing relevant distributional issues for their countries, the assumptions of their models, and their simulation results. Two of the papers compare Doha and free trade outcomes and isolate the effects of the countries' own reforms, while the third reports only a Doha scenario with no separate treatment of a policy change by Brazil. All of the models include agricultural and manufacturing reforms, so the session title is a bit of a misnomer.