Agricultural Policies

Paper

Trade Liberalization in International Dairy Markets: Estimated Impacts

Economic Research Report No. (ERR16) 33 pp, February (2006)

This report examines issues related to modelling complex policy regimes that affect international dairy markets using a partial equilibrium, multiple-commodity, multi-region model of agricultural policy and trade. Average bound tariffs for dairy remain among the highest of all agricultural commodities and dairy trade is characterized by a large number of mega tariffs and tariff-rate quotas (TRQs). In addition to tariffs and TRQs, countries have used milk production quotas to control milk production. Modelling results indicate that liberalization would reduce world dairy product supplies and increase the value of dairy trade.

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