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Review of World Economics

, Volume 148, Issue 1, pp 209–233 | Cite as

Food crisis and export taxation: the cost of non-cooperative trade policies

  • Antoine Bouët
  • David Laborde Debucquet
Original Paper

Abstract

This paper aims to assess the rationales for export taxes in the context of a food crisis. First, we summarize the effects of export taxes using both partial and general equilibrium theoretical models. When large countries aim to maintain constant domestic food prices, in the event of an increase in world agricultural prices, the optimal response is to decrease import tariffs in net food-importing countries and to increase export tariffs in net food-exporting countries. The latter decision improves national welfare, while the former reduces national welfare: this is the price that must be paid to keep domestic food prices constant. Small net food-importing countries are harmed by both decisions, while small net food-exporting countries gain from both. Second, we illustrate the costs of a lack of regulation and cooperation surrounding such policies in a time of crisis using a global computable general equilibrium (CGE) model, mimicking the mechanisms that appeared during the recent food price surge (2006–2008). This model illustrates the interdependence of trade policies, as well as how a process of retaliation and counter-retaliation (increased export taxes in large net food-exporting countries and reduced import tariffs in large net food-importing countries) can contribute to successive augmentations of world agricultural prices and harm small net food-importing countries. We conclude with a call for international regulation, in particular because small net food-importing countries may be substantially harmed by those policies that amplify the already negative impact of a food crisis.

Keywords

Export taxes Food crisis Optimum tariff Computable general equilibrium 

JEL Classification

F13 F15 

Notes

Acknowledgments

The authors would like to thank the participants of a workshop organized at OECD on October 30, 2009 and of a seminar organized at IFPRIMTID in Washington DC on April 10, 2010, and in particular Jeonghoi Kim, David Tarr, Franck Von Tongeren, and Maximo Torero for useful comments on an earlier version. Two anonymous reviewers have been also very helpful. The usual disclaimer applies.

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Copyright information

© Kiel Institute 2011

Authors and Affiliations

  1. 1.LAREFIUniversité de Montesquieu-Bordeaux IVPessac CedexFrance
  2. 2.Markets, Trade and Institutions DivisionInternational Food Policy Research InstituteWashingtonUS

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