An economic analysis of the effects of the WTO dairy dispute settlement on the Ontario dairy industry

Kuntz, Heather Annette
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University of Guelph

This thesis is an investigation of the economic effects of the World Trade Organization dairy dispute settlement on the dairy industry in Ontario. An analytical framework is developed which provides a backbone for the analysis of this trade dispute on Ontario's dairy industry. This framework is further developed into a simulation model of the dairy sector. Demand elasticities for milk and dairy products consumed in Ontario estimated using a Rotterdam demand system specification are employed in the simulation. The results indicate that if Canada can no longer export dairy products, it will be difficult to maintain current production levels with the current supply managed prices. If Canada can continue to export dairy products, there will be little short-term effects on the dairy sector, but there could be potential long-term impacts on the quota system.

economic effects, World Trade Organization, dairy dispute settlement, dairy industry, Ontario