Trade Barrier Volatility and Domestic Price Stabilization : Evidence from Agriculture

Nelgen, Signe; Anderson, Kym

Trade Barrier Volatility and Domestic Price Stabilization : Evidence from Agriculture

Autores

Descripción

National barriers to trade are often varied to insulate domestic markets from international price variability, especially following a sudden spike. This paper explores the extent of that behavior by governments in the case of agricultural products, particularly food staples whose prices have spiked three times over the past four decades. It does so using new annual estimates since 1955 of agricultural price distortions in 75 countries, updated to 2008. Responses by food importers to upward price spikes are shown to be as substantial as those by food exporters, thereby weakening the domestic price-stabilizing effect of intervention by exporters. They also add to the transfer of welfare to food-surplus from food-deficit countries -- the opposite of what is usually thought of when considering inter-sector trade retaliation. Phasing down World Trade Organization-bound import tariffs toward their applied rates would help reduce the legal opportunities for food-deficit countries to raise their import restrictions when international prices slump. To date there is no parallel discipline in the World Trade Organization that limits increases in export restrictions when prices spike upward, however. Bringing such discipline through new World Trade Organization rules could help alleviate the extent to which government responses to exogenous price spikes exacerbate those spikes.

Palabras clave

ADVERSE IMPACTS, AGRICULTURAL ECONOMICS, AGRICULTURAL OUTPUT, AGRICULTURAL POLICY, AGRICULTURAL PRICE, AGRICULTURAL PRICES, AGRICULTURE, AVERAGE PRICE, BARRIER, BEEF, BORDER PRICE, CEREALS, CLIMATE, CLIMATE CHANGE, COCOA, COMMODITY, COMMODITY MARKETS, COMMODITY PRICE, COMMODITY PRICES, COMPARATIVE ADVANTAGE, CONSUMER PRICE, CONSUMER PRICES, CONSUMERS, COUNTRY FIXED EFFECTS, DATES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT POLICY, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, ECONOMIC GROWTH, ECONOMIC GROWTH RATES, ECONOMIC WELFARE, ELASTICITY, EXCHANGE RATE, EXOGENOUS SHOCK, EXOGENOUS SUPPLY, EXPENDITURE, FINANCIAL SUPPORT, FOOD EXPORTS, FOOD IMPORTS, FOOD MARKETS, FOOD PRICE, FOOD PRICES, FOOD SECURITY, FOOD STAPLES, FREE TRADE, GDP PER CAPITA, GOVERNMENT INTERVENTIONS, GROSS VALUE, GROWTH RATES, IMPORT BARRIERS, INCOME, INELASTIC DEMAND, INFLATION, INSURANCE, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, JOBS, LONG-TERM INVESTMENTS, M1, M2, M3, MAIZE, MARKET ACCESS, MARKET POWER, MIDDLE-INCOME COUNTRIES, MONOPOLY, OPEN ECONOMIES, OUTPUT, PER CAPITA INCOME, POLICY IMPLICATIONS, POLICY MAKERS, POLICY RESPONSE, POLITICAL ECONOMY, PORK, PRICE CHANGE, PRICE CHANGES, PRICE DISTORTIONS, PRICE FORECASTS, PRICE INSTABILITY, PRICE LEVELS, PRICE STABILIZATION, PRODUCER PRICE, PRODUCER PRICES, PUBLIC GOOD, PUBLICITY, REAL GDP, SALE, SMALL COUNTRIES, SOCIAL SAFETY NET, SOYBEAN, STOCKS, SUBSTITUTE, SUGAR, SUPPLIERS, SUPPLY SHOCKS, SURPLUS, TAX, TRADE BARRIERS, TRADE OPPORTUNITIES, TRADE POLICIES, TRADE POLICY, TRADE REFORMS, TRADE TAXES, URUGUAY ROUND, UTILITY THEORY, VOLATILITY, WAGES, WHEAT, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO