Implications of Trade Liberalization and Domestic Reforms on EU Agricultural Markets

The objective of this paper is to explore the overall effects of further trade liberalization and the implemented CAP reforms on EU agricultural production, imports and exports within different EU regions by using the Global Trade Analysis Project (GTAP) model. The GTAP model is used to compare a lower tariff reduction formula (EU Proposal) with a higher reduction formula (US Proposal) in order to show how sensitive the examined agricultural commodity/sector is to the different tariff reduction formulae. This analysis reveals that EU imports would escalate and EU exports would plummet with declining EU production because of trade liberalization and domestic policy reforms in the EU agricultural markets and sectors.