Structural Change – Agricultural liberalisation within the European Union

  • 95 pages

  • Published: 18 Sep 2006

  • Author(s): Stoeckel, A, CIE

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One of the common misconceptions of agricultural trade liberalisation is the size of the costs and benefits stemming from the ensuing adjustment. This report finds that the costs associated with structural adjustment are smaller and the benefits larger than commonly portrayed. This finding is particularly true when the trade liberalisation extends broadly across all agricultural and non-agricultural sectors, is across a wide range of countries as proposed under the Doha round of trade talks and when there is an endogenous productivity response to the liberalisation. When all countries liberalise together across all sectors the gains are larger and the costs smaller. Moreover, the gains accrue forever while the adjustment costs are one-off.