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General Agreement on Tariffs and Trade: Agriculture Department's Projected Benefits Are Subject to Some Uncertainty

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Report Type Reports and Testimonies
Report Date July 22, 1994
Report No. GGD/RCED-94-272
Subject
Summary:

Congress is considering legislation to implement the Final Act of the Uruguay Round negotiations. One important issue is the likely impact of the Final Act on U.S. agriculture. In March 1994, the U.S. Department of Agriculture (USDA) issued a report projecting that the Final Act would boost world agricultural trade and benefit U.S. agricultural exports, employment, and farm income. GAO concludes that USDA used a reasonable analytical framework in estimating the Final Act's effect on U.S. agriculture. However, the assumptions it used in forecasting future benefits--specifically the growth in world income, how countries would change their agricultural policies to implement the Final Act, and the response of producers to changing agricultural policies--are subject to substantial uncertainty. Because events could unfold differently than the assumptions in USDA's analysis, the anticipated benefits to U.S. agriculture should be interpreted with caution.

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