Unit Three Case Analysis Read the CASE ANALYSIS: Agricultural Subsidies (page 144). Write a 5 page paper (1500 or morewords) in APA format in response to these questions at least siting four peer reviewed journals articles a. Provide an overview of this case analysis; summarize the key points b.Discuss how the Uraguay Round and the Doha Development Agenda impact agricultural subsidies. c.Discuss the findings in Table 7.3 (page 145). How would you address the findings in a presentation? Below is a recommended outline. 4. Cover page (See APA Sample paper) 5.Introduction a.A thesis statement b.Purpose of paper c.Overview of paper 6. Body (Cite sources using in – text citations.) a. Provide an overview of this case analysis; summarize the key points b. Discuss how the Uraguay Round and the Doha Development Agenda impact agricultural subsidies. c. Discuss the findings in Table 7.3 (page 145). How would you address the findings in a presentation? Conclusion –Summary of main points a. Lessons Learned and Recommendations 3. References – List the references you cited in the text of your paper according to APA format. (Note: Do not include references that are not cited in the text of your paper) Pg144 The Logic of Collective Action Given that the costs to consumers are so high for each job saved,why do people tol- erate tariffs and quotas? Ignorance is certainly the case for some goods,but for some tariffs and quotas,the costs have been relatively well publicized.For example,many people are aware that quotas on sugar imports cost each man,woman,and child in the United States between $5 and $10 per year.The costs are in the form of higher prices on candy bars,soft drinks,and other products containing sugar.Few of us work in the sugar industry,so the argument that our jobs depend on it is weak at best. In a surprising way, however, we probably permit our tariffs and quotas because of a version of the jobs argument.The economist Mancur Olson studied this problem and similar ones and noticed two important points about tariffs and quotas.First,the costs of the policy are spread over a great many people.Second, the benefits are concentrated.For example,we all pay a little more for candy bars and soft drinks,but a few sugar producers reap large benefits from our restrictions on sugar imports.Olson found that in cases such as this,there is an asymmetry in the incentives to support and to oppose the policy.With trade protection,the ben- efits are concentrated in a single industry and,consequently,it pays for the indus- try to commit resources to obtaining or maintaining its protection.The industry will hire lobbyists and perhaps participate directly in the political process through running candidates or supporting friendly candidates. If people in the industry think their entire livelihood depends on their ability to limit foreign competition, they have a very large incentive to become invol.

1. Unit Three
Case Analysis Read the
CASE ANALYSIS: Agricultural Subsidies (page 144).
Write a 5 page paper (1500 or morewords)
in
APA format
in response to these questions at least siting four peer reviewed
journals articles
a. Provide an overview of this case analysis; summarize the key
points
b.Discuss how the Uraguay Round and the Doha Development
Agenda impact
agricultural subsidies.
c.Discuss the findings in Table 7.3 (page 145). How would you
address the findings in a presentation?
Below is a recommended outline.
4. Cover page (See APA Sample paper)
5.Introduction
a.A thesis statement

2. b.Purpose of paper
c.Overview of paper
6. Body (Cite sources using in – text citations.)
a. Provide an overview of this case analysis; summarize the key
points
b. Discuss how the Uraguay Round and the Doha Development
Agenda impact agricultural
subsidies.
c. Discuss the findings in Table 7.3 (page 145). How would you
address the findings in a
presentation?
Conclusion
–Summary of main points
a. Lessons Learned and Recommendations
3. References
– List the references you cited in the text of your paper
according to APA format.
(Note: Do not include references that are not cited in the text of
your paper)

3. Pg144
The Logic of Collective Action
Given that the costs to consumers are so high for each job
saved,why do people tol-
erate tariffs and quotas? Ignorance is certainly the case for
some goods,but for some
tariffs and quotas,the costs have been relatively well
publicized.For example,many
people are aware that quotas on sugar imports cost each
man,woman,and child in
the United States between $5 and $10 per year.The costs are in
the form of higher
prices on candy bars,soft drinks,and other products containing
sugar.Few of us work
in the sugar industry,so the argument that our jobs depend on it
is weak at best.
In a surprising way, however, we probably permit our tariffs
and quotas
because of a version of the jobs argument.The economist
Mancur Olson studied
this problem and similar ones and noticed two important points
about tariffs and

4. quotas.First,the costs of the policy are spread over a great many
people.Second,
the benefits are concentrated.For example,we all pay a little
more for candy bars
and soft drinks,but a few sugar producers reap large benefits
from our restrictions
on sugar imports.Olson found that in cases such as this,there is
an asymmetry in
the incentives to support and to oppose the policy.With trade
protection,the ben-
efits are concentrated in a single industry and,consequently,it
pays for the indus-
try to commit resources to obtaining or maintaining its
protection.The industry
will hire lobbyists and perhaps participate directly in the
political process through
running candidates or supporting friendly candidates. If people
in the industry
think their entire livelihood depends on their ability to limit
foreign competition,
they have a very large incentive to become involved in setting
policy.
The costs of protection are nowhere near as concentrated as the
benefits

5. because they are spread over all consumers of a product.The $5
to $10 per year
that sugar quotas cost each of us is hardly worth hiring a
lobbyist or protesting inWashington. Thus, one side pushes hard
to obtain or keep protection, and the
other side is silent on the matter. Given this imbalance, an
interesting question
asks why there are not more trade barriers.
C A S E
S T U D Y
Agricultural Subsidies
Agricultural issues have long sparked conflict among the
members of the WTO.
Some cases have pitted high-income countries against each
other, among them
disputes between the United States and Japan over apples and
EU-U.S.disputes
over bananas. More recently, the WTO’s Doha Development
Agenda has tried
to address agricultural issues that are central to relations
between developing
and industrial countries. In particular, three issues are on the

6. table: tariffs and
quotas (market access), export subsidies given by countries to
encourage farm
exports,and production subsidies granted directly to farmers.
Direct subsidies are viewed as harmful because they lead to
overproduction,
squeeze out imports,and in some cases result in the dumping of
the surplus product
Chapter 7 Commercial Policy 145
TABLE 7.3 Agricultural Subsidies, 2007
Agricultural Subsidies
(Millions of US$)
As a Percent of
Farm Receipts
Australia

7. 1,827
6
Canada
7,001
18
European Union
134,318
26
Japan
35,230
45
United States
32,663
10
The EU provides the largest subsidies, both in absolute terms
and as a share of GDP but
Japanese farmers are more dependent on agricultural subsidies.
Source: OECD, Producer Support Estimate by Country.

8. http://www.oecd.org/tad/support/psecse
.
in foreign markets. The original GATT agreement included
language on agricul-
ture, but there were so many loopholes that it had little impact.
Not until the
Uruguay Round was finalized in 1993,nearly 50 years after the
signing of the origi-
nal GATT agreement, were significant changes made in the
rules for agricultural
trade. Many quotas were converted to tariffs, and industrial
countries agreed to
reduce their direct support for the farm sector by 20
percent.Indirect supports such
as research and development and infrastructure construction
were recognized as
necessary,desirable,and permissible.
While direct-support payments were curtailed, the Uruguay
Round left
intact direct payments to farmers that theoretically do not
increase production,
are part of a country’s environmental or regional development
plan, or are

9. intended to limit production. If you think these are a lot of
loopholes, you are
right. Consequently, the current round of trade negotiations, the
Doha
DevelopmentAgenda,has taken up the issue of agriculture
again,and develop-
ing countries in particular are pushing to limit government
practices that block
their access to markets in high-income countries or that
subsidize production
by industrial countries.
Table 7.3 shows the range of direct-support payments to
agricultural producers
in many industrial nations. The twenty-seven members of the
EU are grouped
together because their trade and agricultural policies are
formulated at the EU
level,not at the national level.In terms of both absolute support
and the percent-
age of its GDP that it transfers to farmers,the EU is the biggest
subsidizer.Japan
is close in percentage terms but is at about one-half the level in
absolute dollar

10. amounts.The United States is also a large subsidizer, and
Canada is similar. Not
all countries subsidize agriculture, however. Australia’s
supports are less than
one-half the level of the United States as a share of GDP, , and
despite the lower
support levels,it uses its comparative advantages to be among
the top fifteen agri-
cultural exporting countries in the world.