Economy-wide costs of food trade restrictions : the case of Norway

Abstract

Using a partial equilibrium model, the economic cost of the Norwegian agricultural policy is estimated to 1.3% of GDP. General equilibrium calculations elevate the cost estimate to between 1.6% and 3.6%. Thus, the agricultural policy is costly and seems to have adverse effects on other sectors in the economy. Also, the high agricultural support complicates the Norwegian effort in trade talks to obtain better export market access for fish products. Based on present volumes of raw fish available to fish processing, the gain from a complete elimination of tariffs is estimated to be 3.6% of the seafood export value.