Trade Policy and Its Effect on the External Agricultural Trade of Chile 1945–1965

The relationship between external agricultural trade and economic incentives was examined under the hypothesis that a large proportion of the agricultural trade deficit in Chile in the 1945–1965 period resulted from commercial policies, particularly those relating to rate of exchange, price fixing in the internal market, export quotas, and high prices of some inputs originating in protected national industries. Negative rates of protection were estimated for wheat, beef, wool, and lamb, while barley was determined to have a neutral rate of protection. Alternative commercial policies could have reduced the agricultural trade deficit.