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GTAP Resource #3955

"A Coherent Agriculture Trade Policy for Mexico"
by Peters, Ralf and David Vanzetti

Mexico’s agricultural trade reform coincides with increasing imports, decreasing employment in agriculture and high poverty rates in rural areas. Imports have increased from all major trading partners and particularly from NAFTA members who supply more than 80 per cent of Mexico’s agricultural imports. NAFTA has been accused of damaging farmers in Mexico and jeopardizing Mexico’s food self-sufficiency. Although tariffs have been gradually reduced, many Mexican producers have expressed concern about the removal of tariff protection. In addition, although NAFTA specified the removal of bilateral tariffs on both sides of the border, there are no limitations in the agreement concerning the use of domestic support.

The purpose of this study is to assess alternative policy options. A global general equilibrium model, GTAP, is used to analyze the production, trade and welfare effect of such policy changes. The results show that policies that increase distortions may strengthen the agricultural sector in terms of higher output, exports and employment but are likely to have adverse effects on the remaining economy. Removing payroll taxes and policies that increase agricultural productivity instead have positive effects for both the agricultural sector and the economy as a whole.

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Peters, R. (5/1/2012)
Updated: Peters, R. (5/1/2012)
Visits: 2,443
- Agricultural policies
- North America

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