Agricultural Trade Liberalization Research Articles

Agricultural trade liberalization, governance quality, and technical efficiency in the agricultural sector of Southeast Asia

International trade has been regarded as an essential factor in enhancing a country's productivity and efficiency. Nevertheless, developing countries squander money and resources as a result of their deficient institutional quality, impeding their ability to profit from specialization and trade. Therefore, this study intends to investigate the impact of agricultural trade liberalization and governance quality on technical efficiency in Southeast Asia's agricultural sector using balanced panel data spanning from 2002 to 2021. The research utilizes translog stochastic frontier analysis (SFA) with a single-stage maximum likelihood estimation (MLE) to simultaneously calculate the time-varying technical efficiency scores and explore the core factors influencing agricultural inefficiency. The findings reveal that the average output-oriented technical efficiency for ASEAN-8 countries was 94 %. This suggests that there is significant potential to enhance technical efficiency in agricultural production by up to 6 % by addressing the adverse impacts of technical inefficiency. The research findings further point out that Malaysia is the most technically efficient country, having a technical efficiency score of 99.82 %, followed by Vietnam (99.75 %), Thailand (99.70 %), Lao PDR (98.90 %), Myanmar (95.42 %), Indonesia (91.64 %), the Philippines (90.65 %), and Cambodia (76.11 %). The results of disaggregated agricultural trade liberalization demonstrate a significant reduction in agricultural inefficiency in Southeast Asia through agricultural exports and imports. The findings also emphasize that improvements in the rule of law positively contribute to agricultural efficiency, whereas enhancements in terms of voice and accountability and regulatory quality appear to reduce it. Based on these findings, the government should consider enlarging open and liberalized trade policies in order to facilitate the exchange of technology and knowledge within the agriculture sector. Additionally, the government should involve farmers, agricultural cooperatives, local communities, and other relevant stakeholders in the decision-making process to ensure that policies address the specific needs and constraints faced by the sector.

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

AbstractThis study employed computable general equilibrium policy simulations to examine the impact of import tariff liberalization on socioeconomic outcomes including living standards, cost of living, gross domestic product (GDP) from expenditure, total investment expenditure, intermediate input demand, output, value‐added, tariff revenue, sales tax revenue, indirect tax revenue, direct income tax revenue, factor income tax revenue, and factor demand. Findings from the simulations have policy implications touching on a need to embrace reciprocal tariff liberalization under agreements like strategic trade and investment partnerships and economic partnership agreements as they are associated with welfare gains, reduction in cost of living, and GDP growth. Targeted policy incentives could be directed to specific domestic sectors since tariff liberalization has negative impacts on investment expenditure. Incentives regarding intermediate inputs should be directed to the manufacturing and services sectors for liberalization of agrifood commodities. Targeted policy incentives should be directed to the manufacturing and services sectors which experience decrease in output with tariff reductions. Liberalization of manufactured commodities should be accompanied by value‐added incentives directed to the agrifood and home production–home consumption sectors. For the liberalization of manufactured commodities, targeted policy incentives should be directed to the services sector which experiences job losses while for the liberalization of tariffs on imports of agrifood commodities, targeted policy incentives should be directed to the agrifood and the home production–home consumption sectors, which also lose jobs. These targeted policy incentives could support industrial activity and compensate for revenue loss, especially from customs duties.Related ArticlesGruber, Lloyd. 2013. “Trade, Growth, Poverty, and Politics: Toward a Unified Theory.” Politics & Policy 41(5): 723–64. https://doi.org/10.1111/polp.12034.Onyango, Gedion, and Japheth Otieno Ondiek. 2022. “Open Innovation During the COVID‐19 Pandemic Policy Responses in South Africa and Kenya.” Politics & Policy 50(5): 1008–31. https://doi.org/10.1111/polp.12490.Soto, Gloria. 2012. “Environmental Impact of Agricultural Trade Liberalization under NAFTA.” Politics & Policy 40(3): 471–91. https://doi.org/10.1111/j.1747‐1346.2012.00354.x.

Agricultural carbon reduction in China: The synergy effect of trade and technology on sustainable development

The control of carbon emissions from agriculture is imperative in addressing the challenges posed by the greenhouse effect. China must develop a specific pathway for reducing its agricultural carbon emissions, accounting for its unique circumstances and considering the impacts of trade liberalization. (1) The study revealing that agricultural trade liberalization (ATL) has a marked effect on lowering China's agricultural carbon emission intensity (ACEI), with robustness and endogeneity tests supporting these findings. (2) In the pursuit of emissions reduction, the crucial role of technology spillovers (TS) and the optimization of industrial structure (OIS) are essential. (3) The reduction in ACEI is particularly notable in coastal regions, areas with low environmental regulations and during periods characterized by more stable agricultural tariffs. This study shows a synergistic association between ATL and ACEI, indicates the potential for a mutually beneficial situation with advantages in both economic and environmental aspects.

Trade liberalization, economic activity and political violence in the Global South: evidence from PTAs

Summary This paper investigates the impact of agricultural trade liberalization on economic activity and political violence in emerging countries. We use data on all preferential trade agreements (PTAs) signed between 25 low- and middle-income countries and their high-income trade partners between 1995 and 2013. We exploit the implied reduction in agricultural tariffs over time combined with variation within countries in their suitability to produce liberalized crops to find that economic activity increases differentially in affected areas. We also find strong positive effects on political violence, and present evidence consistent with both producer- and consumer-side mechanisms: violence increases differentially in more urbanized areas that are suitable to produce less labour-intensive crops as well as crops that are consumed locally. Our estimates imply that economic activity and political violence would have been around 2% and 7% lower, respectively, across countries in our sample had the PTAs not been signed.

Research on the Impact of Agricultural Trade on Agricultural Carbon Emissions in China

Based on the panel data of 31 provinces in mainland China from 2001 to 2020, this paper empirically examines the impact of agricultural trade on agricultural carbon emissions and its mechanism. The results show that agricultural trade has a significant inhibitory effect on agricultural carbon emissions, and its effects are heterogeneous, and the effect is more obvious in the central and western regions and non-grain-producing areas than in the eastern regions and major grain-producing areas. From the perspective of mechanism, agricultural technology progress is an important channel for agricultural trade to inhibit agricultural carbon emissions, and agricultural trade can inhibit agricultural carbon emissions by promoting agricultural technology progress. Based on this, it is proposed to actively promote the liberalization of agricultural trade, strengthen the exchange of agricultural low-carbon development experience among provinces and trade between agricultural products, and strengthen the progress of agricultural technology to achieve agricultural carbon reduction.

Retracted: Path Deconstruction of Agricultural Environmental Sustainable Development Policy in the Process of International Agricultural Trade Liberalization.

[This retracts the article DOI: 10.1155/2022/3101244.].

Globalisation, COVID-19 and Income Distribution: A Theoretical Evaluation

The article makes a theoretical attempt to explain how different interconnected measures of globalisation—service led growth, tariff reform, agricultural trade liberalisation and capital account liberalisation—affect the skilled–unskilled wage disparity, sector-wise performance, income distribution and aggregate welfare of the economy. We pay attention to land augmenting technological progress as an essential ingredient of inclusive growth and discuss effects of COVID-19 as a supply shock. In so-doing, we construct a three-sector general equilibrium framework with an export-oriented service sector, a tariff-protected import competing manufacturing sector and an export-oriented traded agricultural sector. We find that service-led growth and tariff liberalisation shifts the income distribution in favour of the landed gentry and skilled labour. Agricultural trade liberalisation and capital account liberalisation also debilitate the income distribution. Land augmenting technological progress adversely impacts the manufacturing sector but benefits the other sectors. Following the outbreak of the pandemic, a fall in labour endowment and rise in transaction costs were observed. A decrease in the endowment of skilled labour reduces the production in service sector and increases the production of the manufactured commodity. The results are reversed when the endowment of unskilled labour decreases. An increase in transaction produces unfair outcome from the perspective of income distribution. In this context it becomes imperative to mention that, the construction of the three-sector general equilibrium framework is not new, and that the effects of the COVID-19 pandemic cannot be reduced to just a supply shock. COVID-19 has elements of both supply shock and demand shock, but in this article, we address supply side dimensions of COVID shock in conjunction with the effects of lockdown. In addition, we also demonstrate the robustness of our results to an alternate assumption on the structure of the model. JEL Codes: D50, F66, J31

How Does Agricultural Trade Liberalization Have Environmental Impacts? Evidence from a Literature Review

The liberalization of world trade has led to a significant increase in agricultural trade, which has brought to light various environmental externalities, including climate change, deforestation, and water pollution. While economic studies tend to overlook the environmental effects of agricultural trade liberalization, recent research has shown a growing interest in related aspects. As such, it is crucial to conduct a comprehensive analysis of the environmental impacts of agricultural trade liberalization. This study aims to address this issue by conducting a systematic review of the relevant literature from the past two decades. Research has revealed that agricultural trade liberalization has both positive and negative impacts on the environment. The various mechanisms through which these effects are observed include scale, structural, transport, and technology effects. Most studies have concluded that agricultural trade liberalization has a significantly negative impact on the environment. To address this issue, four potential solutions have been proposed, including factor allocation, policy adjustment, technological innovation, and improvements to compensation mechanisms. Future research should aim to develop a comprehensive model that can effectively examine the environmental impacts of agricultural trade policy distortions and the criteria used to select environmental measures. By doing so, we can gain a deeper understanding of the complex relationship between agricultural trade policies and their environmental consequences.

Current challenges of agricultural trade liberalisation between Ukraine and the EU

Agriculture is the main specialisation of Ukraine in the international arena, which is associated with its geographical features and relatively inexpensive labour. Despite this, it remains relevant to find opportunities for the development of this industry in the country through the use of all available methods. The purpose of the study is to describe the current challenges that arise in the trade relations between these subjects of international entities. This paper examines how the situation in the agricultural sector can be improved by liberalising trade between Ukraine and the European Union. The main methods used are analysis, prediction, abstraction, and deduction. Within the framework of this study, trends in trade in agricultural products between Ukraine and the European Union are evaluated. The paper establishes that this union became the largest Ukrainian trading partner after the outbreak of war. This was caused both by actions on the part of the European Union in support of Ukraine and by the blockade of seaports, which limited the country's export options to only the land route. The study describes the features of changes in the structure of external trade between the unions in the agricultural sector and proposes specific methods to address existing issues in international interactions between countries to better understand the specific features of economic relations between Ukraine and the European Union. In addition, the study includes recommendations on how to improve relations between these subjects of international relations in the future and solve the difficulties that still exist between them in the trade in agricultural products.

Agricultural expenditure and agricultural total factor productivity growth in South Africa

<abstract> <p>The study investigates the impact of government agricultural expenditure on agricultural total factor productivity (TFP) growth in South Africa. South Africa subscribes to the African Union-inspired Comprehensive Africa Agriculture Development Programme (CAADP), established in 2003 to exterminate hunger and lessen absolute poverty. CAADP requires governments to allot at least 10% of government expenditure to agriculture and achieve an average 6% annual growth in agricultural GDP through doubling agricultural productivity. Despite launching CAADP in 2011, South Africa is off-track. Our analysis follows a two-step procedure using data for the period 1986 to 2018. Firstly, using input and output data, we estimate agricultural TFP indices using the growth accounting (GA) and the Malmquist-Data Envelopment Analysis (DEA) methods. Secondly, we use the Autoregressive Distributed Lag econometric technique to estimate the agricultural TFP impact of government expenditure. Estimates from the GA approach proved more reliable. We find that government agricultural expenditure has a significant positive effect on agricultural TFP growth of 4% and 18.5% in the short-run and long-run, suggesting high and increasing marginal gains. Estimations on weather variables reveal that a 1% increase in average temperatures and rainfall would increase TFP by 2.7% and 1.4% respectively. We recommend that South Africa fully implements the CAADP. Also, given significantly positive estimates of imports and exports, we call for increased agricultural trade liberalization biased towards export promotion and more intra-Africa agricultural trade within the AfCFTA framework.</p> </abstract>

Relevance of the Uruguay and Doha Rounds in the Evolution of International Agricultural Trade: The Case Study of Latin American Countries and Continental Products

This article describes the evolution of the regulation of agricultural trade and analyses key aspects of the negotiations of the Uruguay and Doha Rounds, in which the least developed countries managed to make the final outcome of the negotiations conditional on progress in the liberalisation of agricultural trade. Four Latin American countries (Argentina, Brazil, Chile and Uruguay) participated in the lobbying groups set up in both Rounds with the aim of defending their interests against the agricultural and protectionist policies of developed countries. Using specialised databases on international trade, this paper describes the consequences of these negotiations for the foreign agricultural trade of the countries that actively participated in them, with particular reference to the evolution of European and Latin American trade balances. The results of the research show how Latin American countries have become one of the world’s main exporters of oilseeds and sugar, accounting for a third and a quarter of world exports, respectively. In contrast to the deterioration of the European trade balance, during the period analysed the aggregate trade surplus of Latin American countries increased from USD 4458.75 to 49,656.52 million.

Hambatan Indonesia Dalam Implementasi Agreement On Agriculture (AoA) WTO Pada Masa Pemerintahan Jokowi Tahun 2014-2019

Framework of agricultural trade liberalization in the context of World Trade Organization (WTO) General Agreement set out in the field of Agriculture or the Agreement on Agriculture (AOA). AOA is one of the international treaties that are generated through a series of WTO negotiations in the Uruguay Round of General Agreement on Tariffs and Trade (GATT). Pact is applied simultaneously with the establishment of the WTO on January 1, 1995 which contained 13 parts and 21Articles which is equipped with 5 Annex and an appendix to the Annex 5. The AoA has three main pillars, namely the expansion of market access, domestic support and export subsidies. Through Law No. 7 of 1994, Indonesia has ratified the WTO provisions which obliges WTO member states to adapt the rules contained in Annex WTO. One of them is the rules of the food policy Indonesia through Law No. 7 of 1996 concerning Food and Government Regulation No. 68 of 2002 on Food Security.

Agricultural Trade Liberalisation and Agricultural Total Factor Productivity Growth Convergence in Africa

Reducing income inequality in Africa rests on agricultural total factor productivity (TFP) growth and convergence. Liberalizing agricultural trade has emerged as a force of agricultural TFP growth convergence. Notwithstanding increasing agricultural trade, TFP in Africa is falling while the differences in TFP growth rates remain wide. We provide evidence on the impact of agricultural trade liberalization on agricultural TFP growth convergence. We examine trade by origin, disaggregated into intra-Africa, and rest-of-the-world trade. Also, we recognize the uniqueness of agricultural trade liberalization and analyze the effect of the removal of trade-distorting agriculture support. Using maize and rice data for the period 2005-2016, we apply a Feasible-Generalized- Least-Squares estimation of panel data models derived from Barro and Sala-i-Martin (1990). We find evidence for both absolute and conditional convergence, which is stronger for maize. Moreover, agricultural trade openness speeds up TFP growth convergence for both crops. Convergence speed is higher for intra-Africa trade. Estimations on domestic agriculture support suggest that reduction of support beyond distortion-free levels enhances TFP growth convergence. Our findings call for more agricultural trade liberalization. We appeal that the recently launched Africa Continental Free Trade Area prioritizes intra-Africa agricultural trade liberalization and further elimination of trade-distorting domestic agriculture support.
 Vol. 9, No. 2, August 2022: 71-88

Embodied HANPP of feed and animal products: Tracing pressure on ecosystems along trilateral livestock supply chains 1986–2013

The global livestock system puts increasing pressures on ecosystems. Studies analyzing the ecological impacts of livestock supply chains often explain this pressure by the increasing demand for animal products. Food regime theory proposes a more nuanced perspective: it explains livestock-related pressures on ecosystems by systemic changes along the supply chains of feed and animal products, notably the liberalization of agricultural trade. This study proposes a framework supporting empirical analyses of such claims by differentiating several steps of livestock supply chains. We reconstructed “trilateral” livestock supply chains linking feed production, livestock farming, and final consumption, based on the global flows of 161 feed and 13 animal products between 222 countries from 1986 to 2013. We used the embodied Human Appropriation of Net Primary Production (eHANPP) indicator to quantify pressures on ecosystems linked to these trilateral livestock supply chains. We find that livestock induced 65 % of agriculture's pressure on ecosystems, mostly through cattle grazing. Between 1986 and 2013, the fraction of livestock-related eHANPP that was traded internationally doubled from 7.1 % to 15.6 %. eHANPP related to the trade of feed was mostly linked to soybean imported for pig meat production, whereas eHANPP associated to traded animal products was mostly linked to cattle meat. eHANPP of traded animal products was lower but increased faster than eHANPP of feed trade. eHANPP was highest at the feed production level in South and North America, and at the consumption level in Eastern Asia. In Northern Asia and Eastern Europe, eHANPP was lowest at the animal products production level. In Western Europe, the eHANPP was equal at the animal products production and consumption levels. Our findings suggest that options to reduce livestock's pressures on ecosystems exist at all levels of the supply chain, especially by reducing the production and consumption in high-consuming countries and regulating international supply chains.

Increased wheat price spikes and larger economic inequality with 2°C global warming

<h2>Summary</h2> Climate change poses complex impacts on the global wheat supply and demand chain. The impacts of climate change on average wheat yields are reasonably well studied, but its effects on yield variability and the associated economic consequences are poorly understood. Here, we show that future global wheat prices will exhibit steeper spikes at 2°C global warming (6.2% increase in the 95^th percentile of global consumer price anomalies) despite a 1.7% increase in production given that CO₂ fertilization benefits crops. Such economic stresses could be abated by trade liberalization with lower prices. However, on the supply side, trade liberalization has contrasting effects: the profitability of farmers in advanced economies can be maintained or even raised, but this will inevitably cause economic losses and inequalities for farmers in less-developed, wheat-importing countries. Agricultural trade liberalization accompanied by protection policies in developing countries would be beneficial for global food security in the threat of climate change.

Empirical analysis of agricultural trade liberalization and economic growth in Pakistan ARDL approach

This research analyzed the relationship between openness to agricultural exchange, foreign direct investment, capital, consumer price index, and GDP in Pakistan utilizing time series data for the 1971-2019 period. We used autoregressive distributed lag ARDL-bound testing method to analyze the long-run and short-run correlation between projected variables. The study’s findings also confirmed a positive and important long-term correlation between openness to agricultural trade, foreign direct investment and Pakistan’s economic development. There is no long-run relationship between consumer price and economic growth.

International Trade in the CFS Voluntary Guidelines on Food Systems and Nutrition: A Missed Opportunity?

In February 2021, the members of the Committee on World Food Security (CFS) endorsed the first-ever Voluntary Guidelines on Food Systems and Nutrition (VGFSyN) aimed at supporting countries in their efforts to eradicate all forms of hunger and malnutrition, while strengthening the process towards sustainable food systems. This article investigates whether and how the VGFSyN address international trade, whose role in the functioning of food systems is clearly highlighted in current global policy initiatives. The analysis examines the relationship between trade policies and food security and nutrition. It highlights the most important positions on the matter of the members of the CFS during the preparation of the guidelines. We argue that the CFS missed the opportunity to include trade and its profound effect on nutrition in the supposedly systemic approach adopted in the guidelines. We believe that the VGFSyN would have been an ideal opportunity to emphasize the relationship between trade and food and nutrition security, and to call attention to the importance of trade in the transition towards sustainable food systems. world food security, nutrition security, food systems, sustainable food systems, trade policies, Voluntary Guidelines on Food Systems and Nutrition (VGFSyN), WTO Agreement on Agriculture, non-trade concerns, agricultural trade liberalization, right to food

Agricultural trade liberalisation, agricultural total factor productivity growth and food security in Africa

ABSTRACT The study draws inference on the impact of agricultural trade openness, total factor productivity (TFP) growth, and domestic agriculture support on food security in Africa. To retain estimates efficiency and consistency in the presence of complex error terms, we employed the Panel-Corrected-Standard-Error (PCSE) estimator on panel data spanning 2005–2016 for 13 African countries. Results suggest that agricultural trade liberalisation and TFP have significant and favourable effects. Moreover, we find that reducing agricultural support beyond distortion-free levels enhances food security. Further to trade openness, we call for export growth-oriented domestic support anchored on agricultural human-capital development, innovation, and research and development.

Gender in the World Food Economy: Inequitable Transformation of Haiti’s Food Economy

Over the past five decades, agricultural trade liberalization and integration into the global food system have undermined gender equality, women’s empowerment, and food security in Haiti. International actors who design agricultural policies are aware of gendered contributions to Haitian food security, yet ignore this knowledge to privilege an ideological belief that trade liberalization and structural adjustment programs will advance gender equality. I argue that agriculture and food policies must treat gender roles and responsibilities as constitutive to the solution by recognizing their critical contribution to the structure of Haitian agrarian society and accordingly food security. I advance this claim by analyzing scholarly literature, institutional documents, and interviews with interlocutors (n= 292) from rural, peri-urban, and urban settings across Haiti to document how: 1) dominant narratives support an ideological belief that trade liberalization will advance gender equality; 2) integration of Haiti’s local food economy into the world food economy demands the reorientation of gendered labour; 3) women must participate in a system that while purporting to improve food security, ultimately diminishes their nutrition and social, economic and political wellbeing. This research documents that policies designed to globalize Haiti’s food economy on the premise of improving food security actually force women to abandon agricultural production and intensify their labour in less lucrative distribution and consumption roles of imported goods. This analysis documents that the transition ultimately reifies gender inequalities, heighten food insecurity, and contributes to feminist food scholarship.

Agricultural trade liberalization and domestic fertilizer use: Evidence from China-ASEAN free trade agreement

The China-ASEAN (Association of Southeast Asian Nations) Free Trade Agreement (CAFTA) has been recognized as a significant progress in regional economic integration for member countries. While the existing literature has widely studied the trade effects of Free Trade Agreements (FTAs), it remains unclear how it affects environment-related input use. This paper examines the impacts of agricultural trade liberalization on the domestic fertilizer use following the CAFTA. Using a combined dataset consisting of country- and product-level fertilizer use and predictors over the period 1995–2015, this paper empirically examines the impact of CAFTA on the domestic fertilizer use for the exported fresh fruits and vegetables (FFV) from China to ASEAN members. We use the synthesis control method to identify the aggregate impacts of CAFTA on the domestic fertilizer use, followed by the propensity score matching difference-in-difference (PSM-DID) method to examine the mechanism through which fertilizer use is increased. We find that the total volumes of the domestic fertilizer use for Chinese exported FFV increased significantly following the implementation of the Early Harvest Program under CAFTA in 2004. This impact is more evident for exports to the initial ASEAN members compared to the new members. The PSM-DID results suggest that CAFTA increased the degree of export concentration on ASEAN members. The evidence is consistent with the export diversion effect of a customs union instead of the export creation effect due to trade liberalization.