Trade, Subsistence Consumption, Compensation and Resource Management: How Are They Related? Public Deposited

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  • In recent years, considerable attention has been given to the effects of removing trade restrictions on natural resource utilization and on poverty, especially in developing countries. Our paper adds to the growing body of conceptual work to show conditions under which a developing country that, in isolation, is unable to produce enough to meet subsistence consumption requirements of its residents can gain from participation in international trade. Using a small-country, two-sector, steady-state, general equilibrium model, we explore autarky conditions and the circumstances under which trade - perhaps supplemented by resource management - is able to lift all sectors of an economy out of poverty. Indeed, trade may be necessary for survival. However, if subsidies to subsistence sectors are required in order for such trade to take place, international prohibitions or restrictions could return the country to its autarky conditions and, with them, the return of poverty to some sectors. While the model abstracts considerably from "real world" conditions, it may help explain why some countries find it difficult to participate in free trade in the absence of domestic subsidy programs. Those in the more developed world holding expectations about WTO participation by developing countries may need to exercise caution in advocating policy reform that would preclude - or eliminate - such programs.
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  • Emami, Ali, Richard S. Johnston, Raymond F. Mikesell. 2004. Trade, Subsistence Consumption, Compensation and Resource Management: How Are They Related. Peer Review: No. In: Proceedings of the Twelfth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 20-30, 2004, Tokyo, Japan: What are Responsible Fisheries? Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2004. CD ROM. ISBN 0-9763432-0-7
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