Journal Article

Agricultural trade distortions during the global financial crisis

Kym Anderson and Signe Nelgen

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 28, issue 2, pages 235-260
Published in print January 2012 | ISSN: 0266-903X
Published online June 2012 | e-ISSN: 1460-2121 | DOI: https://dx.doi.org/10.1093/oxrep/grs001

More Like This

Show all results sharing these subjects:

  • International Trade
  • Agricultural Economics

GO

Show Summary Details

Preview

Import barriers are often raised during turbulent times, as governments worry about immediate domestic concerns such as unemployment. The recent global financial crisis, however, was accompanied by an exogenous upward spike in the international price of food, which led some countries to raise export barriers, thereby exacerbating both the price spike and the international welfare transfer associated with that change in the terms of trade. As in previous price-spike periods, that response by some food-exporting countries was accompanied by a lowering of import restrictions by numerous food-importing countries, further exacerbating the international price spike. This paper provides new evidence up to 2010 on the extent of the change in domestic relative to international prices in both groups of countries, and compares it with responses during two previous food price-spike periods. It concludes that there is a need for stronger World Trade Organization disciplines on export as well as import restrictions, so as to limit the extent to which beggar-thy-neighbour government responses to international price spikes (up or down) exacerbate those shocks.

Keywords: domestic market insulation; distorted incentives; international price transmission; commodity price stabilization; F14; Q17; Q18

Journal Article.  10587 words.  Illustrated.

Subjects: International Trade ; Agricultural Economics