Assessing protectionism and subsidies in agriculture - a gravity approach

Abstract

This paper provides the first comprehensive empirical analysis of agricultural trade using a gravity model. The data set covers bilateral trade in agricultural goods for 152 countries over the periods 1990–1993 and 1999–2002. The estimations support claims that protectionism and distortive subsidies to agriculture remain widespread among industrialised nations, which are shown to import fewer and export more agricultural products than expected given other economic, political and geographic determinants of trade. However, some developing regions which are often thought to be the main victims of industrial-country protectionism are also found to be relatively closed to agricultural trade.

This paper provides the first comprehensive empirical analysis of agricultural trade using a gravity model. The data set covers bilateral trade in agricultural goods for 152 countries over the periods 1990–1993 and 1999–2002. The estimations support claims that protectionism and distortive subsidies to agriculture remain widespread among industrialised nations, which are shown to import fewer and export more agricultural products than expected given other economic, political and geographic determinants of trade. However, some developing regions which are often thought to be the main victims of industrial-country protectionism are also found to be relatively closed to agricultural trade.