The European agricultural trade policies and poverty

Abstract

This paper tries to estimate the effects of reforming European agricultural trade policy on poverty in Europe and in the developing world. After setting out a conceptual framework linking trade and poverty, it describes a detailed computable general equilibrium modelling exercise showing the effects on poverty of a possible agreement in the Doha Round of the World Trade Organization. It then conducts a global simulation on European agricultural liberalisation and by comparing it with the Doha simulations infers the poverty effects in the developing world. These are benign but not very large. This does not change the case for reform, however; the Common Agricultural Policy harms trade relations with developing countries and causes poverty in Europe.