AbstractThe influence of the European Economic Community's Common Agriculture Policy on world agricultural prices and exports of producing nations is analyzed. CAP reduces demand for agricultural imports, imparting more inelasticity into the world demand for them. Increased inelasticity amplifies price fluctuations born by non‐EEC producers. Results stress the need for incorporating the subject of agricultural protection into the agenda of the current multilateral trade negotiations. Since CAP can amplify fluctuations in world agricultural prices, the system has a direct detrimental effect on non‐EEC producers. CAP's potential for trade restriction, under levies and other protectionist measures, is significant.