Analyzing the effects of U.S. agricultural policy on Mexican agricultural markets using the MEXAGMKTS model

Abstract

This paper uses results from simulations of the FAIRMODEL, USAGMKTS, and MEXAGMKTS models to analyze the effects of changes in U.S. agricultural policy on Mexican agricultural markets. The author concludes that under a scenario of trade liberalization for Mexico, Mexican agricultural production, prices, and trade are quite sensitive to agricultural policy changes in the U.S. The genesis of the research project was the perception that agricultural policies in Mexico (and many other countries) are often second best responses to the negative side effects of broad economic policies aimed primarily at macroeconomic and international trade objectives. The paper also discusses the role of agriculture in Mexican economic policy, and MEXAGMKTS, FAIR and USAGMKTS models. The paper includes an analysis of the sensitivity of Mexican agricultural markets to U.S. agricultural policy and a brief summary of the implications of the results.Environmental Economics&Policies,Economic Theory&Research,Agricultural Research,Access to Markets,Markets and Market Access