Agricultural Trade Liberalization Research Articles

Agricultural Trade Liberalization in a Multi‐sector World Model

AbstractImpacts of agricultural and nonagricultural trade liberalization on agriculture are assessed in a multi‐commodity, multi‐country framework. By modeling simultaneously all goods sectors of the economy, we evaluate the importance of: (a) relative price changes between sectors, and (b) income and exchange‐rate adjustments that follow trade liberalization in a world of floating rates.Specifically, we compare two cases using a static world policy simulation (SWOPSIM) model: agricultural multilateral liberalization and complete multilateral liberalization with floating exchange rates for all countries/regions. In both cases agricultural commodity prices tend to increase, an effect which is more pronounced when currency values adjust. The developing countries, in particular Argentina, Brazil and Mexico, have the most significant advances in agricultural and total production when exchange rates vary. Moreover, the gains from international trade are extended to all countries/regions explicitly specified in the model.

Rent seeking in North-South agricultural trade

Until the Uruguay Round of the GATT negotiations, less developed countries had not lobbied systematically for developed country agricultural trade liberalization either individually or as a group, despite the strong probability that such liberalization would increase less developed countries income. The paper reviews previous hypotheses for this behavior and identifies another explanation. Developed country agricultural distortions sometimes result in income transfers to a group of less developed country agricultural producers who lobby both at home and abroad for the continuation of the developed country distortions. Examples from cassava and sugar trade are discussed. Copyright 1989 by Oxford University Press.

Gatt and Agriculture: The Role of Special Interest Groups

(a) The 1980s have been a decade of crisis for much of world agriculture. Following a period of unusual growth in world demand and trade, the 1980s have witnessed a decline in exports, plummeting agricultural prices, widespread economic distress in farming and associated industries, and rising trade tensions as nations have sought to protect their farmers (Institute for International Economics, p. 1). (b) The playing field in world agricultural trade is uneven. Some countries subsidize their exports; some tax imports; others tax exports. Most nations try to help their farmers through domestic farm programs. All these influences converge to distort the price signals that would otherwise govern supply and demand in a freer trade environment. The resulting hodgepodge has disadvantaged many producers in the United States and other countries, even though their farm products are among the least expensive to produce (Ballenger, Dunmore, and Lederer, p. 1). (c) The problems of agriculture have engaged the attention of world leaders and have become a major issue in the Uruguay Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT). . . . A number of fora, including the GATT Ministerial Meeting at Punta del Este in September 1986 that launched the Uruguay Round, the Organization for Economic Cooperation and Development (OECD) Ministerial Meeting in May 1987, and the Venice Summit of industrial country leaders in June 1987, have issued declarations which support liberalization of agricultural trade and reform of domestic farm policies. . . . Trade Ministers of the GATT countries will also meet in December 1988 in

The Effect of Price and Income Changes on Food-Energy Intake in Sri Lanka

Data is used to analyze the food acquisition behavior of households from a 1980/81 survey designed to be nationally sectorally and regionally representative of Sri Lanka. The poor are shown to be much more responsive to price and income changes than other income groups. The urban population generally exhibits lower income elasticities of demand for food commodities. The poor appear to efficient substitutors thereby mitigating the effects of a price change on caloric intake. The important exception is rice whose elasticity of calorie consumption with respect to price was about 4 times higher than for any other commodity. The reluctance of households to substitute for rice even when faced with rising prices coupled with its large budget share show rice to be the most important consumption good. Higher rice prices are an important determinant of poverty for landless and urban workers. Moderating food prices preferably through technological change is a key ingredient to raising consumption among the poor. Simulations show that even if there are rapid and proportional increases in expenditures of all income groups this will not dramatically increase caloric intake among the poor. However if the absolute value of the increase in real expenditures were distributed equally to all households there would be a marked increase in the % of households consuming an adequate diet.

Agricultural trade regimes: impact on sector proportions, real incomes and hunger in the world

In the article the consequences of agricultural trade liberalization are explored with the help of the Basic Linked System (BLS) of national models developed by the Food and Agricultural Program (FAP) of the International Institute for Applied Systems Analysis (IIASA). After a brief description of the model characteristics, the consequences of agricultural trade liberalization (1) by only the less developed contries, (2) by only the OECD countries, and (3) by all market economies are explored with respect to the impact on (a) the global market environment, (b) domestic relative prices, (c) sectoral composition, (d) real incomes, and (e) level of chronic hunger. The results of these model calculations indicate that a move to liberalized trade results in a small change in growth but that the impact on sectoral balance and hunger is significant, though not always favorable. Copyright 1988 by Oxford University Press.

Linkages between Bilateral and Multilateral Negotiations in Agriculture

At first blush, it might appear that the linkages between the negotiations on agriculture being conducted in the contexts of a bilateral CanadianAmerican Free Trade Area (CAFTA) and the Uruguay Round of multilateral trade negotiations (MTNs) would be rather tenuous. This is for several reasons. First, the primary agricultural trade interest of both countries is focused on the bigticket items of grains and oilseeds, and these are traded almost entirely off-shore. Second, the agricultural commercial diplomacy of both countries is directed primarily at Europe and Japan rather than at each other. Third, insofar as agricultural trade negotiations have become concerned with reducing and eliminating the trade-distorting subsidies provided to farmers by national agricultural policies, both countries have to use the offer to dismantle their farm programs where it will provide most negotiating leverage, which is in Geneva rather than in the bilateral trade negotiations (BTNs). These are three important reasons why early limits might be encountered to the oft-expressed hope and expectation that the BTNs will provide constructive arrangements in agriculture that can serve as models for the MTNs. However, closer examination shows that there are indeed numerous and important interfaces between the two sets of negotiations in terms both of broad common interests and in the finer detail of the ways in which particular issues might be handled. First and foremost, it is decisively important to both the United States and Canada that the agricultural BTNs send the right signals to other countries. This means that the two countries must demonstrate clearly and unequivocally that they can agree to liberalize continental trade in farm and food products, not only by removing frontier measures but, more important, also by changing those elements of national agricultural policies and programs that harm the legitimate trade interests of the negotiating partner. Furthermore, providing the right demonstration effect requires that continental agricultural trade liberalization be on the widest possible scale with few exceptions. Second, both countries have much to gain if they can adopt a common stance in the MTNs. In particular, the reality of the distribution of influence means the results for Canada of the MTNs will be augmented if Canada can support negotiating approaches favored by the United States. By the same token, U.S. negotiating proposals would be strengthened if they were supported by an important member of the Cairns Group. Thus, the BTNs provide the opportunity for seeking and evolving mutually supportive MTN negotiating positions. Third, the BTNs are throwing up all the same issues that will have to be confronted in Geneva. At a minimum, having to address them early means that both countries' negotiators will enter the agricultural component of the MTNs exceptionally well prepared. More important, the BTNs provide a testing ground for alternative approaches and prototype solutions to specific issues, some of which may be subsequently adopted multilaterally. It is to these that we now turn.

Agricultural trade liberalization: Cross-commodity and cross-country impact products

The results of single and multicommodity models are compared to evaluate the importance of multicommodity modeling in policy analysis. The analysis was conducted using wheat, feed grains, and soybean supply and demand models, which incorporate trade and price transmission relationships between major trading regions. Results of an exogenous yield stock indicate that price (export) impacts are generally higher (lower), and implied U.S. export elasticities are lower in cross-commodity than in single-commodity analysis. Trade liberalization impacts are generally, but not always, similar in direction in single and cross-commodity analyses, although magnitudes of impacts differ.

America's Declining Industrial Competitiveness: Protectionism, the Marketplace and the State

A rising protectionist tide is threatening to undermine the domestic political foundation necessary to sustain America's liberal trade posture through the 1980s. U.S. trade officials and recent administrations remain committed to a liberal trade order, but severe crises in key economic sectors of the economy, regionally concentrated in the traditional industrial region of the country, are cutting the ground from beneath them internationally and domestically.At the recent GATT ministerial meeting in Geneva, for example, the United States pressed hard for expanding international trade liberalization in agriculture, services, and high technology industries—all areas of economic activity in which the United States enjoys a strong competitiye position and trade surpluses. American trade officials in Geneva had the burden of advancing their arguments for further trade liberalization against the backdrop of recent U.S. actions, taken in response to domestic pressures, which imposed import quotas on European steel and Japanese automobiles and which adopted a more restrictive trade regime for textiles and apparel in the renewal of the Multi-Fiber Agreement. While the GATT meeting was in progress, the U.S. Congress was considering a domestic content bill that would require auto-makers selling over 900,000 vehicles in the American market to use 90 percent U.S. labor and parts by 1985. U.S. trade representative William Brock III called this “the worst piece of economic legislation since the 1930s.” The House passed the bill with 215 votes, but it died in the Senate. The bill will certainly be re-introduced in the more protectionist 98th Congress.

America's Declining Industrial Competitiveness: Protectionism, the Marketplace and the State

A rising protectionist tide is threatening to undermine the domestic political foundation necessary to sustain America's liberal trade posture through the 1980s. U.S. trade officials and recent administrations remain committed to a liberal trade order, but severe crises in key economic sectors of the economy, regionally concentrated in the traditional industrial region of the country, are cutting the ground from beneath them internationally and domestically.At the recent GATT ministerial meeting in Geneva, for example, the United States pressed hard for expanding international trade liberalization in agriculture, services, and high technology industries—all areas of economic activity in which the United States enjoys a strong competitiye position and trade surpluses. American trade officials in Geneva had the burden of advancing their arguments for further trade liberalization against the backdrop of recent U.S. actions, taken in response to domestic pressures, which imposed import quotas on European steel and Japanese automobiles and which adopted a more restrictive trade regime for textiles and apparel in the renewal of the Multi-Fiber Agreement. While the GATT meeting was in progress, the U.S. Congress was considering a domestic content bill that would require auto-makers selling over 900,000 vehicles in the American market to use 90 percent U.S. labor and parts by 1985. U.S. trade representative William Brock III called this “the worst piece of economic legislation since the 1930s.” The House passed the bill with 215 votes, but it died in the Senate. The bill will certainly be re-introduced in the more protectionist 98th Congress.

America's Declining Industrial Competitiveness: Protectionism, the Marketplace and the State

A rising protectionist tide is threatening to undermine the domestic political foundation necessary to sustain America's liberal trade posture through the 1980s. U.S. trade officials and recent administrations remain committed to a liberal trade order, but severe crises in key economic sectors of the economy, regionally concentrated in the traditional industrial region of the country, are cutting the ground from beneath them internationally and domestically.At the recent GATT ministerial meeting in Geneva, for example, the United States pressed hard for expanding international trade liberalization in agriculture, services, and high technology industries—all areas of economic activity in which the United States enjoys a strong competitiye position and trade surpluses. American trade officials in Geneva had the burden of advancing their arguments for further trade liberalization against the backdrop of recent U.S. actions, taken in response to domestic pressures, which imposed import quotas on European steel and Japanese automobiles and which adopted a more restrictive trade regime for textiles and apparel in the renewal of the Multi-Fiber Agreement. While the GATT meeting was in progress, the U.S. Congress was considering a domestic content bill that would require auto-makers selling over 900,000 vehicles in the American market to use 90 percent U.S. labor and parts by 1985. U.S. trade representative William Brock III called this “the worst piece of economic legislation since the 1930s.” The House passed the bill with 215 votes, but it died in the Senate. The bill will certainly be re-introduced in the more protectionist 98th Congress.

Food Price Policy and Income Distribution in Low-Income Countries

The complex interrelationships of price policy and income distribution are analyzed, beginning with the simple effects of changes in food prices as they are reflected in consumer-budget data and consumption patterns and the effects on producers of different income levels. The analysis progresses to a more complex study of the effect on agricultural technology and production and on employment in non-agricultural areas. The impact is shown to be greatest on low-income groups, whose economic condition also has the greatest impact on food demand. Secondary impacts on employment and income of low-income groups also result from changes in the real income of high-income consumers as prices change. On the basis of this analysis, the author suggests food-pricing policies that will encourage technological change in agriculture and employment growth in industry.

Kennedy round Agricultural Negotiations and the World Grains Agreement

DR. WITT in his letter of invitation to participate in this program said, We would like to have you develop a paper on the Kennedy Round negotiations and the World Grains Arrangement, with substantial emphasis on the political forces which developed. My purpose today is to try to cast some light on the political and economic forces that shaped the outcome of the negotiations. The negotiations were launched with high hopes that real progress could be made in reconciling national agricultural policies with a liberal and rational international trade policy. Previous GATT negotiations in many instances failed to achieve significant progress in agricultural trade liberalization because the negotiations were limited to tariff matters, whereas the effective barriers to trade were often embodied in national

Agricultural Policy and Trade Liberalization in the United States 1934-1956.

Agricultural Policy and Trade Liberalization in the United States 1934-1956.