April 1999 Edition
EU's Agenda 2000 Reforms Affect
Reforms To Reduce Both Export Subsidies And Import Duties
The above analysis is for illustrative purposes only and assumes an unchanged world wheat price of $105/MT (SRW, C&F Rotterdam) and an EU internal market price equal to intervention after the reforms ($111/MT). Further explanation is given in the full article.
Even the "watered-down" version of the European Union's Agenda 2000 reforms may bring important changes to their grain sector and world trade. The 15 percent cut in the intervention price over 2 years, while smaller than originally proposed, should help lower internal market prices as did the last round of reforms in 1993, and thereby reduce the size of export subsidies.
The reforms will also reduce EU import duties for all grains by an estimated $30/MT, since duty paid prices are capped at 155 percent of the new, lower intervention price. That will enhance the competitive advantage of imports vis-a-vis domestic grains, and expose the EU to the prospect of expanded imports of high-quality wheats like HRW, DNS, and Canadian Western Spring, as well as cheap, poor-quality wheats from Eastern Europe. However, more wheat imports would also exacerbate domestic surpluses and could stimulate additional EU exports.
For further information on this topic, click to go to the full article.
Foreign Countries' Policies and Programs
Situation and Outlook: Commentary and Current Data
Historical Data Tables: Selected Regions and Countries
General Footnotes for Grain Tables
Grain and Feed Contact List
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