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Impact of Trade Liberalization on Potato and Cabbage Prices


This paper analyzes price trends and scrutinizes the policy environment for potato and cabbage in terms of import policies, tariffs and other trade policies embodied in the General Agreement on Tariffs and Trade-World Trade Organization (GATT-WTO). Comparative analysis between the pre-GATT years (1990-1995) and the post-GATT years (1996-2000) was done for the Cordillera Administrative Region (the highest potato- and cabbage-producing region in the Philippines), Northern Mindanao, and Bukidnon. GATT has been instrumental in the trade liberalization of potato and cabbage. Imports of potato and cabbage remarkably went up. Aside from the higher demand for these commodities, the weakening of the price competitiveness of the locally produced potato and cabbage because of GATT and probably the exporting countries’ response to globalization could have contributed to the increase in Philippine imports. Another reason could be the large production decline in these two crops, accompanied by increases in population. Although nominal prices generally increased through the years, real prices showed some decline with GATT.

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