1. Agriculture is one of the main industries that most countries try to protect. The WTO's Agriculture Agreement aims to open up agricultural trade and make policies more market-oriented. The Agricultural Agreement does allow governments some flexibility to continue protecting their domestic agricultural industries with tariffs, quotas, and subsidies, but it limits the types of protectionist policies that can be used.

Consider a WTO member country with high tariffs and subsidies to protect its domestic agricultural industry. What would happen if that country lowered its tariffs on imported agricultural goods and cut back its subsidies? Name one potential benefit for the country's domestic economy, and one potential drawback or loss.

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Payton Sharp

9 June, 23:44

1. Agriculture is one of the main industries that most countries try to protect. The WTO's Agriculture Agreement aims to open up agricultural trade and make policies more market-oriented. The Agricultural Agreement does allow governments some flexibility to continue protecting their domestic agricultural industries with tariffs, quotas, and subsidies, but it limits the types of protectionist policies that can be used.

Consider a WTO member country with high tariffs and subsidies to protect its domestic agricultural industry. What would happen if that country lowered its tariffs on imported agricultural goods and cut back its subsidies? Name one potential benefit for the country's domestic economy, and one potential drawback or loss.

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Owen Gilmore · Answer 1

One potential benefit to this would be that the people are given more choices with regard to the products that they would want to buy. So if they prefer to buy a lot of foreign agricultural products, then more spending will incur. At the same time, local companies will fight back by making better products which will cause people to spend more. More spending means more taxes. The drawback here is that if the country does not greatly limit foreign goods from coming in, local companies will not survive.