Multilateral agricultural trade reform: Potential impacts of current negotiations on New Zealand*

Abstract

Multilateral agricultural negotiations are a crucial part of the WTO's Doha Development Agenda, the outcome of which may significantly impact New Zealand. In this paper we review progress and key proposals put forward to date in the negotiations. We use a newly available and significantly improved version of a global trade database to model the potential economic effects of trade reforms that might be agreed in the Doha Round. Our results indicate that New Zealand is likely to experience relatively large aggregate gains from reform, with significant benefits arising from terms of trade improvements. In the event of a successful outcome from the Doha Round, New Zealand's farm sector and agricultural exports are likely to become further dominated by dairy products. We find that increased access to the markets of industrial countries and a rapid phase‐out of agricultural export subsidies are likely to be of particular importance. Efforts to negotiate global reductions in domestic farm support appear to offer the least benefit to New Zealand.