Global agricultural trade: a computable general equilibrium analysis for Turkey

The World Trade Organization (WTO) Agricultural Agreement is aiming at the liberalization of the trade of agricultural products. According to the rules of the Agreement, member states are in the commitment of reducing the trade barriers. This, of course, will have some impacts on the economies of all the member countries including Turkey. The main subject of this thesis is therefore to examine the short run impacts of the commitments imposed by the Agreement on the Turkish economy in a general equilibrium model framework. The TRCGE model formed for this purpose is single country, multi sectoral, static, computable general equilibrium models. The model determines through a simultaneous equations system, the production, distribution, saving, investment and foreign trade relations among seven producer sectors; four of agricultural and three non-agricultural, and three factors of productions, one household, a government, firms and the rest of the world. WTO Agricultural Agreement contains the rules on market access, export subsidies and domestic subsidies. Turkey, as a developing country, accepted a reduction of 24 % in tariffs and, adopted budget and quantity reductions in 44 commodities or commodity groups in connection with export subsidies. Turkey didn?t make any reduction in domestic subsidies due to the fact that they are not in excess of minimum support rate, which corresponds 10 % of the total value of agricultural product. With regard the fulfillment of the commitments of WTO Agricultural Agreement, estimated world agricultural prices have been taken from the related literature and added to the model exogenously. In the thesis, instead of taking an estimation of world agricultural prices by sectoral basis, an estimation of minimum and maximum world prices has been taken and added to the model. The policy implications of the model, in relation to Turkey?s commitments imposed by the Agreement, have been examined according to six different scenario considering total or partial effects with the assumptions of minimum and maximum world price estimations. The main findings concerning production, distribution, consumption, saving, investments by sectors and foreign trade have been presented in tables. Key Words: Agricultural Trade, Liberalization, World Trade Organization, Computable General Equilibrium Analysis, Turkey.