This study views multilateral tradc negotiations as a strategie garne among nations or regions, including taxpayer, consumer, and producer components. Payoffs arc calculated from an interrncdiatc-run international trade rnodel initialized with 1989 data. For the public at large, the Nash equilibrium and socially optimal outcomc is liberalization of trade -unilateral or multilateral. Maintenance of the status quo of market distortions eosting the world billions of dollars each year is rational only if producer payoffs are sovereign so that strategies optimal for producers arc considered optimal for nations. Remediai policies are discussed, including opportunities for economie education, political system reform, and less incentives for producers to scuttle multilateral trade negotiations. * Corresponding author, Elsevier Science B.V. SSD/ 0169-5150(93)EOOI8-! subsidies prompted the U.S. initially to press for
The Single European Act, amending the 1957 Treaty of Rome and ratified by all member states of the European Community (EC) in 1987, will attempt to remove EC internal economic borders by the end of 1992. The so-called Europe 1992 plan will attempt to harmonize standards and regulations and eliminate nontariff barriers which continue to restrain trade among EC countries.Farm commodity support prices are established each year uniformly for all EC countries in European Currency Units (ECUs). However, within each country, local support prices change as national currency exchange rates change relative to ECUs. So-called green rates of exchange emerged when individual countries established a special real exchange rate relative to the ECU for agriculture in their country. The original rationale for allowing adjustments for agriculture from established ECU-local currency exchange rates was to permit a country to hold steady nominal local farm support prices. Some authors argue that green rates allow countries to set their own unique real support rate.1,2 Regardless of the reason, real agricultural support prices differ substantially among countries of the EC, sacrificing a truly common agricultural policy. Monetary Compensatory Amounts (MCAs), a system of border taxes and subsidies, are interventions designed to avoid market arbitrage by precisely offsetting differences in price supports among countries.
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