Nontariff measures and product differentiation: Hormone-treated beef trade from the United States and Canada to the European Union

We investigate how a combination of the sanitary and phytosanitary (SPS) measure and product differentiation affects beef trade and the consequences for the United States (US)–European Union (EU) hormone-treated beef trade dispute. We develop a partial equilibrium model to represent the global beef markets and product differentiation between non-hormone-treated beef, hormone-treated beef, and other beef. The results show that removing the SPS measure increases EU hormone-treated beef imports from the US and Canada and decrease beef consumption. In addition, EU hormone-treated beef consumption and imports can be related to a few key indicators of product differentiation. The framework we develop can estimate EU hormone-treated beef consumption and imports based on a minimum of parameters relating to product differentiation, thereby providing useful applied economic analysis of a key trade measure.     

The Tariff-Only Import Regime for Bananas in the European Union: Impacts on ACP and Non-ACP Suppliers

The European Union is bound by World Trade Organisation agreements to move to a tariff-only import regime for bananas no later than 1 January 2006. What should change at that date is the trade regime, not the level of protection offered to African, Caribbean and Pacific (ACP) countries. This article provides an assessment of the trade impact of this tariff-only regime on the basis of simulations carried out with a dynamic partial equilibrium model of the world banana market using 2002–03 as the base year. Simulation results show that the tariff levied on imports from non-ACP countries should be set at around €250 per tonne in order to maintain in 2008 the EU import structure that prevailed in 2003. A lower tariff would increase EU total imports, to the benefit of non-ACP countries and to the detriment of the group of ACP countries. Conversely, a higher tariff would decrease EU imports from non-ACP countries and increase imports from ACP suppliers. Under this assumption, the increase in ACP exports to the EU would mainly benefit the two West African suppliers, Cameroon and Ivory Coast, who are more competitive and have a more price elastic supply than the ACP suppliers of the Caribbean islands.     

Agricultural trade in North America: Trade creation, regionalism and regionalisation

Trade creation in agricultural products is defined as a statistically significant positive break in the trend function of the growth in exports and imports between member countries. The present study attempts to determine the time of any break in the trend of real exports and imports between the Canada–USA Free Trade Agreement (CUSTA) and the North American Free Trade Agreement (NAFTA) member countries for the years 1980:I through 1999:II, and document the scale of the phenomenon. The present study finds trade creation only occurs in USA agricultural exports to Canada because of CUSTA. The results confirm the theory that the regionalism of NAFTA did not lead to regionalisation or an increasing share of intraregional international trade.     

中国—东盟热带水果贸易及对中国热带水果产业影响研究

本文对中国—东盟自由贸易区建立以来中国与东盟国家热带水果的贸易现状及经济效应进行了分析。研究发现,早期收获计划及零关税政策的实施显著促进了中国热带水果及其加工品进口量的增长,丰富了中国热带水果消费市场,对东盟国家的贸易创造和贸易转移效应影响突出,也提高了中国热带水果贸易的经济效率,但同时却成为中国与东盟贸易逆差的根源。随着低价格东盟热带水果进口量的进一步增长,中国热带水果生产及加工产业将面临更严峻的挑战。     

中美贸易摩擦对中美农产品贸易结构的影响研究

中美农产品贸易一直是双方经贸关系中的重要组成部分。自2018年4月中美贸易摩擦发生以来,中美双方公布的贸易清单几乎涵盖两国双边贸易所有产品,这一决策可能会使中国农业产业和粮食安全面临严峻考验。本文获取了中美分三次发布的加征关税产品清单,对加征关税产品占中美农产品贸易的份额进行核算,并使用贸易强度指数、基尼-赫希曼指数,测算了2001-2017年中美农产品贸易的强度和产品、地域结构。分析结果表明,中美互加关税会使中国对美国农产品进口额下降超过50%,对美农产品出口额也有小幅下跌,同时,中国农产品进口主要转移至巴西、加拿大、澳大利亚、新西兰、印度等国,美国农产品出口部分转移至韩国、荷兰、墨西哥。基于以上研究,本文认为,短期中国要解决大豆和饲料的缺口问题,长期要调整农业种植和农产品进口结构,增加肉类及肉制品进口量,并有意识地调整贸易结构,分散风险,提高应对突发事件的抵御能力,保障国内农业产业安全。     

Asia–Pacific food markets and trade in 2005: a global, economy–wide perspective

Rapid industrialization in East Asia, particularly China, is raising questions about who will feed the region in the next century and how Asia will be able to pay for its food imports. The paper first reviews existing food sector projections and then takes an economy–wide perspective using projections to 2005, based on the global CGE model known as GTAP. After showing the impact of implementing the Uruguay Round, the paper explores several alternative scenarios. A slowdown in farm productivity growth is shown to be costly to the world economy, as is slower economic growth in China. Failure to honour Uruguay Round obligations to open textile and clothing markets in OECD countries would reduce East Asia's industrialization and thereby slow its net imports of food. On the other hand, the trade reform that is likely to accompany China's (and hence Taiwan's) membership of the World Trade Organization (WTO) adds 30 per cent to estimated global gains from the Uruguay Round. Their WTO accession is projected to boost exports of manufactures and strengthen food import demand by not only China but also its densely populated neighbours with whom it trades intensively.     

Measuring the Trade Restrictiveness of Domestic Support using the EU Common Agricultural Policy as an Example

We develop an index that measures the overall trade effects of domestic support payments. Our index is based on the Mercantilist Trade Restrictiveness Index (MTRI) and is capable of analysing the development of the trade restrictiveness of domestic support payments over time and across countries. It facilitates the evaluation of agricultural policy reforms introducing changes in the composition of domestic support payments. We conduct this analysis with a computable general equilibrium model that is extended to depict detailed agricultural policies using the Common Agricultural Policy of the European Union (EU) as an example. For the representation of agricultural policies, we updated the underlying database by incorporating detailed EU domestic support payments taken from the OECD Producer Support Estimate (PSE) tables and reconcile PSE data with the WTO classification scheme. Our index confirms a decrease in trade distortion stemming from the implementation of decoupled support in the EU. In addition, the trade-equivalent protection rate shows that the trade restrictiveness of domestic support payments depends on the assumptions made with regard to the degree of decoupling of those payments.     

Seasonal protection of F&V imports in the EU: impacts of the entry price system

The measures of border protection applied by the European Union (EU) to imports of fruits and vegetables (FV) are complex and usually not well represented in trade models, not only because of the range of instruments still constraining trade, but also because of product differentiation and seasonality in these products. This article assesses the impact of eliminating entry price (EP) constraints applied to a group of FV products. The proposed model is of a partial equilibrium nature and takes seasonality into account. We have applied the model to imports of tomatoes, cucumbers, clementines, and table grapes. Trade impacts of eliminating EP are significant for particular origins, during specific seasons, most notably for Moroccan tomatoes. The volumes and prices of products originating in the EU experience moderate reductions.     

GM crop technology and trade restraints: economic implications for Australia and New Zealand*

How much might the potential economic benefit from enhanced farm productivity associated with crop biotechnology adoption by Australia and New Zealand (ANZ) be offset by a loss of market access abroad for crops that may contain genetically modified (GM) organisms? This paper uses the Global Trade Analysis Project (GTAP) model to estimate effects of other countries' GM policies without and with ANZ farmers adopting GM varieties of various grains and oilseeds. The gross economic benefits to ANZ from adopting GM crops under a variety of scenarios could be positive even if the strict controls on imports from GM‐adopting countries by the European Union are maintained, but not if North‐East Asia also applied such trade restaints. From those gross economic effects would need to be subtracted society's evaluation of any new food safety concerns and negative environmental externalities (net of any new environmental and occupational health benefits), as well as any extra costs of segregation, identity preservation and consumer search.     

The Doha Round of the World Trade Organization and Agricultural Markets Liberalization: Impacts on Developing Economies

We investigate the impacts of multilateral removal of all border taxes and farm programs and their distortions on developing economies, using a world agriculture partial equilibrium model. We quantify changes in prices, trade flows, and production locations. Border measures and farm programs both affect world trade, but trade barriers have the largest impact. Following removal, trade expansion is substantial for most commodities, especially dairy, meats, and vegetable oils. Net agricultural and food exporters emerge with expanded exports; net importing countries with limited distortions before liberalization are penalized by higher world prices and reduced imports. We draw implications for current World Trade Organization negotiations.     

China's Accession to the World Trade Organization: What Is at Stake for Agricultural Markets?

We analyze the impact of China's accession to the World Trade Organization on major crop and livestock markets using the Food and Agricultural Policy Research Institute (FAPRI) modeling framework. We incorporate expected changes in consumer income, textile production, and trade policies as exogenous shocks to the baseline model. Following accession, revenues decline in China's livestock, grain, and oilseed industries, while cotton production prospers despite increased imports. Chinese consumers benefit from lower food prices, with vegetable oil, dairy, and meat consumption increasing significantly. Argentina, Brazil, Canada, the European Union, and the United States are the greatest beneficiaries from expanded agricultural trade with China.     

How important are tariffs and nontariff barriers in international markets for fresh fruit?

International markets for agricultural products are often subject to a range of trade barriers, and horticultural products are no exception. This article examines the economic implications of tariffs and sanitary and phytosanitary (SPS) regulations that are applied to global markets for fresh apples and fresh oranges. We calculate regional‐level tariff rates and ad valorem equivalents for SPS barriers following the price‐wedge approach. A simulation model is developed and used to assess the price, quantity, and welfare implications of reducing tariffs, removing SPS barriers, and removing SPS barriers that have been identified as a Specific Trade Concern (STC) by the World Trade Organization. Results suggest that a 36% reduction in global tariffs would lead to greater welfare gains than would the elimination of SPS measures in apple markets. However, in orange markets, we find that SPS measures have much larger economic implications for producers and consumers. Here, a 36% reduction in tariffs would lead to smaller overall welfare effects compared to removal of all SPS measures, and only slightly larger effects than those from removal of STCs alone.     

Multilateral Trade and Agricultural Policy Reforms in Sugar Markets

We analyse the impact of trade liberalisation, removal of production subsidies and elimination of consumption distortions in world sugar markets using a partial‐equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase in 2011/2012 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist Organisation for Economic Co‐operation and Development (OECD) countries (the EU, Japan, the US) experience an import expansion or export reduction and a significant contraction of production in unfettered markets. Competitive producers in both OECD countries (Australia) and non‐OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and the location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non‐OECD countries.     

The role of intellectual property rights in seed technology transfer through trade: evidence from U.S. field crop seed exports

A panel of 134 countries over the period 1985–2010 is used to evaluate the effect of intellectual property rights (IPRs) on field crop seed imports from the United States. Based on estimating a gravity equation using the Heckman selection and Poisson fixed‐effects panel econometric methods, the results indicate that membership of countries in both the International Union for the Protection of New Varieties of Plants and the Trade‐Related Aspects of Intellectual Property Rights Agreement of the World Trade Organization have a positive and statistically significant effect on their imports of U.S. field crop seeds. These results, however, are also sensitive to both income level of importing countries and better enforcement of IPRs by those countries.     

Sanitary and Technical Regulations: Issues for Trade Liberalization in the Dairy Sector1

Sanitary and technical regulations can impede trade liberalization in dairy products. The World Trade Organization tackle regulatory trade barriers mainly through the Sanitary and Phytosanitary (SPS) and the Technical Barriers to Trade (TBT) agreements. The SPS and TBT agreements are presented, focusing on those provisions that are relevant for the dairy sector. Arbitration of recent SPS disputes clarified the right of a country to set a particular level of protection, as well as the role of international standards. Building on the recent jurisprudence of the disputes settled under the World Trade Organization, the practical scope of the SPS and TBT agreements is explained. Empirical consequences for trade in the dairy sector are presented on the basis of three examples, the Bst issue, the controversy on mandatory pasteurization of cheese and the definition and labeling of yogurts. Les règlementations nationales sur le plan sanitaire ou technique peuvent créer des obstacles aux échanges. L'Organisation Mondiale du Commerce (OMC) traite ces problémes principalement à trovers l'Accord Sanitaire et phytosanitaire (SPS) et celui sur les Obstacles techniques aux échanges (OTE). Ces accords et leurs effets possibles sur le secteur laitier sont présentés. L'arbitrage des différends récents par l'OMC dans le domaine sanitaire et phytosanitaire a claifié le droit d'un pays àétablir son propre niveau de protection des consommateurs et a précisé la portée des normes internationales. En s'appuyant sur la jurisprudence récente, la portée pratique des accords SPS et OTE est expliquée. Les conséquences pratiques pour le commerce international des produits laitiers sont présentées sur la base de trois exemple, la Bst, la controverse sur la pasteurisation des fromages, et la définition et l'étiquetage des yaourts.     

Comparative Advantage in Demand: Experimental Evidence of Preferences for Genetically Modified Food in the United States and European Union

The United States (US) exports more than US$6 billion in agricultural commodities to the European Union(EU) each year, but one issue carries the potential to diminish this trade: use of biotechnology in food production. The EU has adopted more stringent policies towards biotechnology than the US. Understanding differences in European and American policies towards genetically modified (GM) foods requires a greater understanding of consumers’ attitudes and preferences. This paper reports results from the first large‐scale, cross‐Atlantic study to analyse consumer demand for genetically modified food in a non‐hypothetical market environment. We strongly reject the frequent if convenient assumption in trade theory that consumer preferences are identical across countries: the median level of compensation demanded by English and French consumers to consume a GM food is found to be more than twice that in any of the US locations. Results have important implications for trade theory, which typically focuses on differences in specialization, comparative advantage and factor endowments across countries, and for on‐going trade disputes at the World Trade Organization.     

A Spatial Equilibrium Analysis of U.S.–Canadian Disputes on the World Softwood Lumber Market

This paper utilizes a world spatial equilibrium model to examine the effects of U.S.–Canadian softwood lumber disputes on U.S., Canadian, and other exporters' and importers' lumber markets. Results show that the U.S. import tariff on Canadian softwood lumber impacts prices, supply, demand and trade flows not only in the United States and Canada but also in the other countries. Though the goal of U.S. trade restriction is to limit imports from Canada and protect its producers, the United States cannot fully accomplish this goal as non-Canadian exporters fill the void left by the reduced imports from Canada. Canadian producers lose from the U.S. policy, but their loss is mitigated as Canada redirects its exports to other importers. Importing countries such as Japan and the European Union benefit from the U.S. trade restrictions as Canada seeks to sell its softwood lumber to these countries.     

Home Bias in Primary Agricultural and Processed Food Trade: Assessing the Effects of National Degree of Uncertainty Aversion

This study investigates the effects of national degrees of uncertainty aversion (unfamiliarity avoidance) on the magnitude of bias towards domestic products rather than imports. The empirical analysis is implemented for primary agricultural and processed food products, using a panel dataset covering trade between and within OECD countries. Primary agricultural products are often blended and associated with reference prices. Conversely, processed food products exhibit higher levels of product differentiation. The empirical results confirm expectations by emphasizing the magnifying effects of uncertainty aversion on home bias in the case of processed food products but not in the case of primary agricultural products. These magnifying effects are primarily associated with processed food products destined for final household consumption. Other results reveal significant variations between different countries (based on geo‐economic and national income categories). Our results also indicate that home bias and uncertainty aversion effects on home bias have not decreased over time. The empirical results remain robust under different estimation methods.     

Regulating State Trading Enterprises in the World Trade Organization: An Urgent Need for Change? Evidence from the 2003–2004 U.S.–Canada Grain Dispute

Article XVII of the General Agreement on Tariffs and Trade is the main World Trade Organization (WTO) vehicle for regulating trade-distorting policies implemented through state trading enterprises (STEs). The effectiveness of Article XVII depends on how WTO dispute panels and the Appellate Body interpret the provisions. This study examines the 2003 WTO trade dispute case between the United States and Canada over Canadian grain imports and the practices of the Canadian Wheat Board, an export STE. We conclude that the WTO panel and Appellate Body rationales for their findings demonstrate that Article XVII needs substantial revision for the WTO to discipline STE trade-distorting practices.     

Trade Reform and the Corn Market: Prospects for the World Trade Organization Negotiations on Agriculture

Government support and trade restrictions on agricultural commodities are among the most globally distorting protectionist policies. This is especially true with regards to corn. Vast production subsidies and import barriers, primarily within the European Union and China, have artificially inflated the global supply of this commodity, while restricting the available consumer markets. This impact is augmented by the preferential treatment granted in these countries to the production and importation of the best available substitute to corn, soybeans. Using an econometric model with commodity data over the past 20 years, this article predicts the likely impact of potential World Trade Organization (WTO) trade pacts on these corn trade distortions. Despite the WTO setback in Seattle, the vast global benefits resulting from agricultural trade liberalization in corn alone validate a continued push towards freer trade.