The International Coffee Agreement: Economics of the Nonmember Market

The provisions of the 1983 International Coffee Agreement (ICA) and proposed reforms to eliminate exports to nonmember importers at discounted prices are analyzed. The discounted sales were a key issue that led to the breakdown of negotiations for a new ICA and the end of export quotas under the current agreement. A model of the world coffee market incorporating the policy response of exporting countries is used to analyze the welfare implications of the different alternatives. The model shows that the price discounts result from the structure of the current agreement (the existence of nonmember importing countries) and allocation of export quotas for the member market, which does not reflect export capacity. Welfare calculations based on the model show that several small exporters derive substantial benefits from nonmember market sales. These exporters will not be willing to comply with an arrangement to allocate quotas for the nonmember market unless they receive a large share of this market. However, the large exporters appear determined to retain their market share. The results of the model predict that, unless importers no longer insist on eliminating the price discounts, a new agreement is unlikely.     

The impact of agricultural productivity increases in the former Soviet Union and Eastern Europe on world agricultural markets

This paper studies the impact of productivity increases in the former Soviet Union and Eastern Europe on world agricultural markets and the regions’ bilateral and sectoral agricultural trade flows. We use a six‐region, 13‐sector general equilibrium model. We find that productivity increases lead to a significant increase in the regions’ agricultural output and exports and the former Soviet Union's agricultural imports. The former Soviet Union's net agricultural imports increase, whereas Eastern Europe's net agricultural trade balances improve. Overall, agricultural exporters will benefit, particularly, if productivity increases are not limited to or disproportionally high in agriculture.     

Food safety issues and fresh food product exports from LDCs

Fresh food products have a high income elasticity of demand and few traditional trade barriers in high income markets. As such, they represent an important opportunity for less developed country (LDC) exporters. Fresh food product exports account for half of all food and agricultural exports from LDCs to high income countries. But these products may be subject to greater food safety risks and potential trade barriers arising from sanitary regulation. This paper reviews the challenges and issues facing LDCs in meeting food safety standards for export. These issues include: (a) the importance of fresh food product trade by region and the kinds of issues that arise from those products; (b) the role of farm to table approaches and hazard analysis critical control points (HACCP) in ensuring safety; (c) the role of the public sector in LDCs in facilitating trade; (d) the potential role of the SPS Agreement in resolving disputes and determining equivalency of standards between high and low income countries.     

Brexit Impacts on Irish Agri‐food Exports to the UK

The Irish agri‐food sector is particularly exposed to the consequences of the UK's departure from the EU given that the UK is the destination for 37 per cent of its exports. This article discusses the main channels whereby Brexit may impact this trade. They include the impact of possible further depreciation of sterling and the loss of the protected market status that Irish exporters currently enjoy on their sales on the UK market. There is the possibility that tariffs may be imposed on trade flows between the two countries as well as higher trade costs when either exporting to or importing from the UK. There would also be potential disruption of supply chains on the island of Ireland and the particular difficulties of policing the land border between the North and South of Ireland. Solutions to address some of these problems are available, but will take time to negotiate. Even if the worst outcomes can be avoided, Brexit is likely to have significant structural implications for Irish agriculture. The erosion of the value of privileged access to the UK market will require structural adjustments both in terms of market diversification as well as farm‐level production.     

Export Barriers in the Western Australian Horticulture Industry

This study was designed to identify perceived barriers to exports specific to Australian horticulture industry and the relative impact of these barriers on firms' export decisions. Specifically the study attempted to examine the differences, if any, in perceived export barriers by non-exporting and exporting firms. The analysis suggested seven major export barrier factors/variables. These barriers are somewhat different to barriers identified in recent studies suggesting that export barriers may be industry and country specific. The perceived seriousness of some of the barriers was significantly different for non-exporters and exporters. A discriminant analysis suggested, however, that it was not possible to predict whether a firm will be an exporter or not based on their perceptions of export barriers. The implications of the findings for the management of Australian horticulture exports are discussed.     

Would African Countries Benefit from the Termination of Kenya’s Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses

This paper assesses the impact of Kenya’s preferential status on EU demand for imported roses by country. Import demand equations were estimated using a production version of the Rotterdam model in an Armington framework. With the expiration of the Lomé Convention, tariffs (up to 24%) on Kenyan roses were likely if an Economic Partnership Agreement (EPA) was not signed by January 2008. Roses from African countries not subject to tariffs were expected to displace Kenya’s exports in the future. However, results of this study showed that roses from African countries were complements in the EU market and those exports from Zimbabwe and Other African countries would have been negatively impacted if a Kenya–EU EPA was unsuccessful. Given the maximum import duty on Kenyan roses, EU imports from Kenya would decrease by 9.1% and imports from Zimbabwe and Other African countries would decrease by 6% and 4%, respectively.     

木质林产品贸易格局的社会网络分析

基于2001—2018年区域全面经济伙伴关系协定(RCEP)成员国的木质林产品进出口贸易数据,采用社会网络方法分析RCEP成员国之间的木质林产品贸易网络格局。研究表明:RCEP成员国之间的木质林产品贸易联系比较紧密且贸易关系日益复杂;RCEP成员国之间的木质林产品贸易网络正向着最优的网络形态发展且木质林产品贸易往来趋于平衡;RCEP成员国之间签署、生效和升级自由贸易协定会加强RCEP成员国之间的木质林产品贸易关系;截至2018年,中国的木质林产品贸易地位已取代日本在RCEP木质林产品贸易网络中的核心位置,成为唯一的核心国家。因此,中国一方面要重视RCEP成员国的木质林产品市场,以此为契机促进更高水平的对外开放,推进全球贸易自由化;另一方面,中国木质林产品要依托质量、品牌、技术、管理创新等提高产品附加值,通过高质量发展来提高价值链分工地位,通过实施双循环战略实现国内国际双循环相互促进,提升国际竞争力,进而获取较高的贸易利得,确保中国木质林产品贸易的健康和可持续发展。     

The price of sanctions: An empirical analysis of German export losses due to the Russian agricultural ban

The aim of this paper is to contribute to the vivid political discussion on the consequences of the Russian agricultural import ban on the German export market by quantifying export losses that German agri-food exporters encountered on the Russian market due to the agricultural import ban of 2014. A gravity-type approach is used to measure the sanction effect in a panel of German agri-food exports covering the period from January 1999 to June 2018. The ban effect is disentangled from a sequence of different geopolitically- and economically driven episodes. Once macroeconomic developments of the Russian economy as well as individual stages of decreasing trade cooperation in the preban period are accounted for, the import ban reduced German agri-food exports significantly but was not the major cause. Therefore, a simple elimination of the ban will not be enough to restore trade to the presanctions level.     

中国辛辣类蔬菜出口贸易空间关联与溢出效应——基于RCEP框架下的实证

目的 探讨中国对RCEP伙伴国辛辣类蔬菜的空间关联与溢出效应,揭示中国辛辣类蔬菜外销竞争力情况,促进我国辛辣类蔬菜出口贸易发展,并为相关农产品贸易政策提供借鉴。方法 文章基于反距离平方的权重矩阵测度了各伙伴国经济空间关联程度,并以2011—2020年中国对RCEP伙伴国辛辣类蔬菜的贸易额为面板数据,构建空间杜宾模型,分析中国辛辣类蔬菜出口贸易的空间溢出效应。结果 中国GDP、RCEP伙伴国辛辣类蔬菜总产量、RCEP伙伴国辛辣类蔬菜单产和绿色贸易壁垒程度的空间溢出效应显著为负,且贸易距离整体上对RCEP伙伴国的出口贸易额呈现正向的促进作用,RCEP伙伴国GDP和中国辛辣类蔬菜总产量的空间溢出效应显著为正,中国辛辣类蔬菜单产对中国辛辣类蔬菜出口贸易的空间影响不显著。结论 中国对RCEP伙伴国辛辣类蔬菜出口贸易存在空间负相关关系,即表现出一定的空间聚集现象,建议强化伙伴国空间关联度、优化产品出口结构和完善质量标准体s系。     

The Market Structure and Price Competition in China's Wheat Import Market:

This paper reveals that wheat exporters to China compete in an imperfectly competitive market. U.S. wheat exports face strong price competition from Argentina, Australia, Canada, and the European Community, but has a highly elastic demand in China. By adopting an aggressive promotion policy, the U.S. could reduce the market shares of Argentina and Canada. China would shift to wheat from Argentina, Australia, and Canada if U.S. wheat exports were interrupted because of high prices or non-price trade frictions. An expansion in China's wheat imports would accrue to wheat from Argentina and the U.S.     

Straddling Contract and Estate Farming: Accumulation Strategies of Senegalese Horticultural Exporters

This paper draws on primary qualitative data to explore the accumulation strategies of indigenous exporters in the Senegalese horticultural sectors who supply European markets. It argues that exporters straddle contract and estate farming as a strategy to break through and survive in European markets, where the power of large‐scale retailers is increasing and the proliferation of food standards act as a non‐tariff barrier. It also analyses the relative opportunities as well as the costs of contract and estate farming. Then it focuses on how the control of buyers over suppliers is far from complete, revealing downstream and upstream spaces and dynamics of non‐compliance. In conclusion, some reflections on the development of capitalism in Africa are advanced.     

A joint test of market power, menu costs, and currency invoicing

This article investigates exchange rate pass-through (ERPT) and currency invoicing decisions of Canadian pork exporters in the presence of menu costs. It is shown that when export prices are negotiated in the exporter's currency, menu costs cause threshold effects in the sense that there are bounds within (outside of) which price adjustments are not (are) observed. Conversely, the pass-through is not interrupted by menu costs when export prices are denominated in the importer's currency. The empirical model focuses on pork meat exports from two Canadian provinces to the U.S. and Japan. Hansen's (2000) threshold estimation procedure is used to jointly test for currency invoicing and incomplete pass-through in the presence of menu costs. Inference is conducted using the bootstrap with pre-pivoting methods to deal with nuisance parameters. The existence of menu cost is supported by the data in three of the four cases. It also appears that Quebec pork exporters have some market power and invoice in Japanese yen their exports to Japan. Manitoba exporters also seem to follow the same invoicing strategy, but their ability to increase their profit margin in response to large enough own-currency devaluations is questionable. Our currency invoicing results for sales to the U.S. are consistent with subsets of Canadian firms using either the Canadian or U.S. currency.     

Residual demand measures of market power of Russian wheat exporters

Traditionally, the international wheat market has been considered a good example of a market with perfect competition. Yet, several articles provide evidence of imperfect competition and price discrimination in the wheat trade. However, these studies focused on traditional high‐quality wheat exporters such as Canada and the United States. In contrast, this article investigates whether Russian wheat exporters exercise market power in eight selected importing countries using the residual demand elasticity (RDE) model. The article makes two major contributions. First, it focuses on a nontraditional exporter, who exports mainly wheat of mediocre quality to low‐ and middle‐income countries. Second, the RDE model is estimated for the first time using a nonlinear estimator, the instrumental variable Poisson pseudo‐maximum likelihood estimator. This is important because the double logarithmic functional form can provide biased results in the presence of heteroskedasticity. The results indicate that Russian wheat exporters can exercise market power in only a few markets, while they are price takers in the majority of importing countries.     

Exports and governance: the role of private voluntary agrifood standards

The empirical evidence that institutional differences across countries affect bilateral trade is robust. The crucial question remains how countries can enhance trade amid these differences. In this article, we measure the degree to which governance and institutions differ between countries as “governance distance.” Using a sample of EU/EFTA imports, we examine how adopting private agrifood safety standards modify the effect of governance distance on exports of fruits and vegetables, in particular apples, bananas, and grapes, within a structural gravity framework. Our results show that while increasing governance distance hinders bilateral trade, the interaction of standards and the governance distance is positively associated with exports, hence partially offsetting the direct trade‐inhibiting effects of the latter. GlobalGAP certified countries see the trade‐inhibiting effects of governance distance on their exports reduced by about 50%, ceteris paribus.     

The New Tomato Suspension Agreement: What Are the Implications for Trade Flows?

This paper examines the implications of the new tomato suspension agreement (signed on March 4, 2013, by the U.S. government and Mexican tomato producers) for trade in fresh tomatoes and processed tomato products. The empirical analysis is performed through a gravity model that accounts for vertical linkages between primary and processed goods. The estimated gravity parameters are used to implement suspension agreement scenarios. The results show that the new suspension agreement leads to considerable decreases in Mexico's exports of fresh tomatoes to the United States. These decreases are accompanied with various trade diversion and deflection effects. There are increases in Mexico's exports of processed tomato products to the United States and other countries, and in Mexico's exports of fresh tomatoes to non‐U.S. destinations. These increases do not amount, however, to considerable compensations of the decreases in Mexico's fresh tomato exports to the United States. The results also suggest that the initial 1996‐based suspension agreement has significantly smaller impacts on trade flows over the period that preceded the implementation of the new suspension agreement.     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

Potential Impacts of Transatlantic Trade and Investment Partnership (T-TIP) on the Fresh Vegetable and Beef Trade

ABSTRACT

The Transatlantic Trade and Investment Partnership (T-TIP) negotiations influence the global economic position of both the European Union (EU) and the United States (U.S.). Agricultural issues are an important part of the negotiation. There have been several analyses of the aggregate impacts of a T-TIP agreement. This report analyzes the commodity impacts on trade for fresh vegetables and beef. Vegetables represent the situation where the U.S. is a growing net importer and the EU has substantial potential for expanding exports to the U.S. in this highly competitive marketplace. Beef represents the situation where sanitary and phytosanitary restrictions on hormone use in production have prohibited consumer choices from being revealed in the marketplace for both the EU and the U.S. The authors provide insight into where the comparative advantages lie in freer trade situations.     

Price Discrimination and Pricing to Market Behavior of Canadian Canola Exporters

The role of exchange rate fluctuation on the pricing behavior of Canadian canola exporters to Japan, Mexico, and the U.S. is examined using a model identifying noncompetitive and exchange rate related pricing behavior. Price discrimination was identified for Canadian canola exports to the three destinations over the period of 1993–99. Results also suggest that Pricing to Market strategies were employed for Japanese imports. Canadian canola exporters used local currency price stabilization to dampen the effects of relative price changes in the Japanese currency, perhaps linked to the large size of Japanese imports relative to Mexico and the U.S.     

Necessarily or Sufficiently Trade-Impeding for Africa?1 The Agri-food Safety Regulations

The dearth of empirical studies on Africa’s food export effects of the food safety regulations in the European Union has really affected evidence-based policies that could stimulate compliance. This study investigates whether the technical regulations necessarily or sufficiently constitute trade-impediment for Africa. This study adopts an augmented Helpman, Melitz and Rubenstein two-step selection model for all the applicable food safety regulations in this market. Three commodities are selected; Banana, Grape and Tomato at the HS-6-digit level covering the period from 1995 to 2016. Owing to the heterogeneity in exporters’ capacity and exporting performance as well as their size structure, this study finds that the food safety regulations are necessarily trade-impeding for the grapes and tomatoes but not for banana at the decision to export stage. However, at the intensity of the commodities’ exporting, the measures become sufficiently trade-enhancing due to quality standards upgrading, compliance and certification of exports.     

Patent Rights and Trade: Analysis of Biological Products, Medicinals and Botanicals, and Pharmaceuticals

This article analyzes the effects of foreign patent rights on U.S. bilateral exports. The empirical analysis covers three highly disaggregated drug industries over three decades. We estimate bilateral trade equations for each industry using cross-country data on the strength of national patent rights. The findings show that strong foreign patent rights enhance the market power of U.S. drug exporters across countries with weak imitative abilities. Alternatively, strong foreign patent rights stimulate the market expansion of U.S. drug exports across countries with strong imitative abilities. These effects are larger in magnitude during the 1980–90s relative to the 1970s.