We wish to thank an anonymous referee for helpful comments.
State Trading Enterprises as an Impediment to Improved Market Access: The Case of the Korean Rice Market
Version of Record online: 3 MAR 2008
© 2008 The Authors. Journal compilation © 2008 Blackwell Publishing Ltd
Review of International Economics
Volume 16, Issue 3, pages 431–443, August 2008
How to Cite
McCorriston, S. and MacLaren, D. (2008), State Trading Enterprises as an Impediment to Improved Market Access: The Case of the Korean Rice Market. Review of International Economics, 16: 431–443. doi: 10.1111/j.1467-9396.2007.00713.x
- Issue online: 8 JUL 2008
- Version of Record online: 3 MAR 2008
The trade and welfare effects of tariffs are well known. Less well known, and more difficult to analyze, are the economic effects of state trading enterprises (STEs). Despite STEs in importing countries having the potential to limit market access, they are no longer on the agriculture agenda in the Doha Round Negotiations in the WTO, because some Members have asserted that importing STEs do not distort international trade. We evaluate this assertion through the use of a theoretical model of an STE, which is calibrated to data for the Korean rice market. We show that this STE does distort international trade by restricting market access relative to a Cournot benchmark, and that it affects the domestic and international distribution of social welfare. This finding permits the conclusion that an important opportunity is being missed in the negotiations to improve market access, because importing STEs are not on the agenda.