Regulation and Protectionism under GATT: Case Studies in North American Agriculture

By Andrew Schmitz; Garth Coffin et al. | Go to book overview

4
Supply Management Under Minimum
Import Access Requirements

J. M. Alston and J. D. Spriggs


Abstract

Previous studies of trade policy reform have treated domestic quotas as exogenous. In our more realistic model, quotas on imports are chosen jointly with domestic production quotas to '"optimize" total welfare and its distribution among producers, consumers, importers and taxpayers. The General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFIA) agreements impose minimum import access requirements. This chapter shows the unintended consequences of GATT and NAFTA regulations that arise from the optimizing response of the Canadian government subject to the constraints of the minimum access requirements.


Introduction

In Canada, supply management programs currently exist for eggs, broiler chickens, turkeys, and milk. In these programs, domestic supply is regulated by controlling both domestic production and imports. Trade barriers that prevent international arbitrage from undermining domestic prices, are an essential feature of this system. In the negotiations leading up to the Canada-` United States Free Trade Agreement (CUSTA), the NAFIA, and the Uruguay Round GATT agreements it was argued that the import quotas involved in supply management programs were trade-distorting. 1 Consequently, these agreements included provisions that will modify supply management in Canada in the post-GATT era. The main features of these agreements, as they relate to supply management, are tariffication and minimum access requirements. Tariffication refers to the agreement to replace import quotas on supply-managed commodities with tariffs, which are to be gradually phased down. It is widely acknowledged, however, that there is a great deal

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Regulation and Protectionism under GATT: Case Studies in North American Agriculture
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Acknowledgments vii
  • About the Editors and Contributors ix
  • Section One - Overview of the Effects of Gatt 1
  • 1 - Itroduction: Trade and Regulations in Transition 3
  • References 18
  • 2 - Post-Gatt Assessment of the World Marketplace 20
  • Notes 35
  • 3 - Consequences of Tariffication 37
  • References 50
  • 4 - Supply Management Under Minimum Import Access Requirements 51
  • Notes 62
  • References 62
  • 5 - Imports into Canada: Why Have They Remained Low? 64
  • Notes 76
  • References 77
  • Section Two - Case Studies of Gatt's Effects 79
  • 6 - Regulation -- the Us Dairy Industry 81
  • References 94
  • 7 - Cost Competitiveness in the Canadian and Us Dairy Industries 96
  • Notes 115
  • References 116
  • 8 - Supply Management and Vertical Coordination: the Role of Cooperatives 118
  • Notes 126
  • References 127
  • 9 - Value-Added Economic Potential 128
  • Notes 145
  • References 146
  • 10 - Tobacco Supply Management: Examples from the United States and Australia 147
  • References 158
  • 11 - Gatt and the Us Peanut Market 160
  • Notes 178
  • References 179
  • 12 - The Us Sugar Industry: the Free Trade Debate 180
  • Notes 199
  • References 201
  • Section Three - Regulation and Supply Management 203
  • 13 - Supply Management Canadian Style 205
  • Notes 221
  • References 223
  • 14 - Power Relationships in the Political Process 226
  • Notes 241
  • References 244
  • 15 - Provincialism: Problems for the Regulators and the Regulated 245
  • References 267
  • 16 - Provmcial Versus Centralized Pricing: Protectionism and Institutional Design 269
  • References 283
  • 17 - Venturing into the Political Market 284
  • Notes 296
  • 18 - Vertical and Horizontal Coordination 299
  • Notes 312
  • References 313
  • 19 - Will the Supply Management Cartel Stand? 314
  • Notes 330
  • References 330
  • About the Book 332
  • Index 333
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