Compare and Contrast tariff and non-tariff barriers
Therefore the removal of export subsidies would have to be accompanied by agricultural reform , which could take many forms . An example would be the implementation of production control through strict production quotas to eliminate surplus production due to the export subsidy stricter than those that already exist through the CAP . Another policy option would be to reduce support prices . The effects of this would be to increase domestic consumption due to the reduced prices consumer have to pay in the domestic market , as well as a reduction in domestic agricultural production due
to the lower price producers receive . Hence the need for export subsidies would diminish , as the potential for a build up of agricultural stock would be reduced
According to a study by Stout , Leetmaa and Normile , the elimination of EU support prices , with tariffs to protect agricultural products against import competition remaining in place , the largest impact within the EU would take place in the diary , coarse grain and beef markets . This is expected since these sectors are where the highest levels of price support are found , and for these agricultural products , as domestic prices fall , production and hence exports decline subsequently . This reduction in EU exports would have the effect of driving up world prices , increasing convergence between previously-distorted EU prices and world prices
The same study referenced above also studied the scenario in which the tariffs which protects the agricultural markets from import competition are eliminated . Such a policy initiative would allow the EU to import agricultural commodities at the world prices , in turn driving down the domestic EU prices of commodities , which are currently protected by heavy tariffs . The impact of tariff elimination would be felt the hardest in the markets where import tariffs are the highest , for example , the sugar , dairy , beef , corn and...
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