A TRADE LIBERALIZATION IN INTERNATIONAL DAIRY MARKETS

International dairy industries remain among the most distorted agricultural sectors. Dairy average bound tariffs remain among the highest of all agricultural commodities, and dairy trade is characterized by a large number of megatariffs and tariff-rate quotas (TRQs). The objective of our study is to examine how the international dairy markets might respond to policy changes under various assumptions, using a partial equilibrium, multiple-commodity, multiple-region model of agricultural policy and trade. Our results indicate that liberalization will reduce supplies, increase dairy trade, and raise world prices