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Multifunctionality and Agricultural Trade Negotiations
Author(s) -
Paarlberg Philip L.,
Bredahl Maury,
Lee John G.
Publication year - 2002
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/1467-9353.00022
Subject(s) - negotiation , agriculture , international trade , business , international economics , multilateral trade negotiations , economics , world trade , geography , political science , archaeology , law
Differing views of multifunctionality—attributing nonmarket benefits to agricultural production—continue to be an obstacle in World Trade Organization (WTO) negotiations. Some nations see multifunctionality as justifying subsidies to agricultural production; others see it as disguised protection. This paper shows that while multifunctionality never justifies trade interventions, it can justify production subsidies or taxes. Recognizing that the subsidies or taxes can be economically efficient policies, nations must precisely define and value the externalities in order to design policies and defend those interventions in the WTO. Trade rules are developed that accommodate domestic policy intervention while preventing disguised protection.