We employ an empirical general equilibrium model of the CAP to determine which factors and countries would be expected to be opposed to or support reform of the CAP. The objective is to determine who the "friends" and "enemies" of the CAP are. The analysis studies the extent to which lobbying activity by these interested parties could be expected to encourage or discourage internal EC reform of the CAP. Several alternative polices to reform the CAP are evaluated in this manner, so as to determine if one or other set of policies has greater chance of being accepted. Specifically, we study the recent MacSharry proposals for reform, as well as the stated negotiating positions presented at the GATT. The result will be a summary assessment of the relative politico-economic acceptability of these reform proposals within the EC. Our results lead to a very simple policy conclusion. Given the se of policy packages considered here, there is little doubt that the EC is most inclined to adopt the full MacSharry proposal. This suggests that pushing the U.S. or Helstrom proposals is not likely to lead to EC acceptance unless the EC receives significant compensation from other aspects of the multilateral trade negotiations.
Iowa State University
Harrison, Glenn W. and Rutstrom, E. E., "True Friends and Enemies of Reforming the Common Agricultural Policy" (1992). GATT Research Papers. 48.