These considerations are now extended for the case of the CMOB. Figure 3 presents some basic economic impacts of the CMOB on the European market for banana imports from third countries.
Middlemen in the marketing channel are also included, which is important when allocative and redistributive impacts of the CMOB are derived.
Under the CMOB, a global quota, [q.sub.1], is fixed.
What are the welfare implications of the CMOB on the European banana market?
The analysis is much more difficult when asking for the CMOB's net welfare effect from the European point of view.
The net welfare loss due to the CMOB is generally higher the more restrictive the global quota for dollar banana exporters.