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Agricultural Trade Policy Reforms and Trade Liberalisation in the Mediterranean Basin

A Partial Equilibrium Analysis of Regional Effects on the EU-27 and on the Mediterranean Partner Countries

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Aikaterini Kavallari

Bilateral and multilateral trade agreements have been gaining attention and relevance in recent years. For the countries around the Mediterranean basin the most important regional trade agreements involved are the Euro-Med Agreements, which influence their trade flows as they aim to promote regional integration. Based on the theory of applied welfare economics, this study analyses empirically the impacts of different policy scenarios on the agricultural sector of Mediterranean countries by using an extended and modified version of the trade policy model AGRISIM. The results show that trade liberalisation, either multilateral or bilateral, would be beneficial for the Mediterranean agricultural markets due to positive welfare effects and should be considered by policy makers.
Contents: Agricultural trade in the Mediterranean basin – Theoretical analysis of allocative and distributional effects of agricultural trade policies – Overview of empirical studies on agricultural policy reforms in the Mediterranean basin – Description of the main functions and extensions of the partial equilibrium model AGRISIM – Simulations with AGRISIM and discussion of results.