EC Enlargement and Trade Liberalization in the Vegetable Oils Market Report as inadecuate




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The third EC enlargement to include Spain and Portugal raised substantial problems inthe international olive oil market, where the EC-10 accounted for 48 percent of production and 52 percentof consumption and the new EC members for 30 percent and 24 percent, respectively. Olive oil was highlysupported in the EC-10, where producer prices were more than twice the international prices. Extending(from 1986 to 1991) the EC-10 price support to Spanish and Portuguese producers would have meant hugeEC-12 budgetary costs and a complete price collapse of the tiny world market.This paper presents three simulations of the world market by means of a multi-product and multiregionalprice equilibrium model of the oils and fats sector: (1) the impact of the EC enlargement toinclude Spain and Portugal without CAP changes; (2) the impact of the EC-12 offer in the GATTnegotiations implying a 30-percent decrease in domestic support for olive oil, butter, animal fats, and a6-percent import tariff for oilseeds and other vegetable oils; and (3) the decrease in the producer pricesupport of olive oil that would be needed to offset the impact of enlargement on the EC-12 trade balance.

Subject(s): Agribusiness

International Relations/Trade

Issue Date: 1992

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/197734 Page range: 61-69

Total Pages: 9

Record appears in: International Association of Agricultural Economists (IAAE) > 1992 Occasional Paper Series No. 6





Author: Croci-Angelini, Elisabetta ; Tarditi, Secondo

Source: http://ageconsearch.umn.edu/record/197734?ln=en



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