Impact Of Agricultural Trade Liberalization Research Articles

The influence of agricultural trade liberalization on agricultural total factor productivity growth: Empirical evidence from ASEAN countries

Agriculture is a way of life in the ASEAN region due to the fact that eight out of ASEAN member states rely on agriculture for food and income. Therefore, the present study empirically explores the impact of agricultural trade liberalization on agricultural total factor productivity (ATFP) growth in ASEAN countries using panel data from 2002–2021. By deploying the data envelopment analysis-Malmquist productivity index (DEA-Malmquist) approach in the first stage and the pooled mean group (PMG) panel autoregressive distributed lag (ARDL) model in the second stage, the findings reveal that ATFP in the ASEAN countries demonstrated moderate growth over the study period, with an average mean value of 1.028. This signifies that the average growth in ATFP in the region was 2.8% across the countries and over a period of time. This suggests that the ASEAN countries have become increasingly dependent on technological innovation in their agricultural sectors in recent years. Agricultural trade liberalization positively contributed to ATFP growth in the short term, whereas the impact was not statistically significant in the long term. These consequences are highly significant and should not be disregarded since trade liberalization plays a crucial role in determining agricultural competitiveness.

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.

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.

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

The Impact of Agricultural Trade Liberalization on Agricultural Total Factor Productivity Growth in Africa

ABSTRACT This paper examines the impact of agricultural trade liberalization on agricultural total factor productivity (TFP) growth in Africa using panel data for 13 countries from 2005 to 2016. Our contribution is two-fold. Firstly, we analyse the impact of domestic agriculture support in the spirit of the Agreement on Agriculture. Secondly, we draw attention to the South–South versus South–North debate to the agriculture sector. We examine the impact of trade by source, split between trade within and outside Africa. We compute TFP growth for maize and rice using the Malmquist-data envelopment analysis approach. We then use the dynamic fixed effects approach to estimate panel auto-regressive-distributed-lag models. TFP computations show falling growth rates for both maize and rice. Evidence suggests that domestic agriculture support measures have positive output effects but negative productivity effects. We find that reducing trade-distorting agriculture support coupled with good governance significantly increases TFP growth. Accordingly, we appeal that domestic agriculture support is refocused from producer payments to infrastructure development. Furthermore, we document that South–South trade productivity gains match and can surpass South-North Trade. Hence we emphasize increasing intra-Africa agriculture trade.

Global agricultural trade liberalization: Is Sub-Saharan Africa a gainer or loser?

ABSTRACTThis paper analyzes the potential impact of agricultural trade liberalization on Sub-Saharan Africa. We used the Agricultural Trade and Policy Simulation Model to estimate the potential effects of agricultural trade liberalization, mainly in the US and EU, on the world-market prices of agricultural commodities. We then used the estimated price changes to assess the impact of these reforms on net-food importers as well as other Sub-Saharan African countries that enjoy preferential trade agreements with the EU and US. The results indicate that the world market prices of all commodities imported by Sub-Saharan Africa are expected to rise while the prices of the key export commodities of the region would either decline or remain unchanged. Given that the prices of major food commodities are expected to rise, net-food-importing countries will experience increasing import bill, thus leading to welfare loss. Major Sub-Saharan Africa sugar exporters who are beneficiaries of preferential agreements such as the EU sugar protocol and US AGOA initiative will become losers as preferences erode due to global liberalization. Thus, the region is expected to generally become a net loser from the current WTO reform modalities.

The Paradox of Agricultural Trade Liberalization in Bangladesh and Tanzania

This paper examines some of the contradictions and theoretical ambiguities of agricultural trade liberalizationon the welfare of smallholder farmers. Using production, consumption and price data for pre-and post-liberalization periods for two main agricultural crops from Bangladesh (rice) and Tanzania (maize) we critically analyse the correlation between domestic and international prices of rice in Bangladesh and maize in Tanzania to estimate impact of agricultural trade liberalization on price stability/volatility and food security to measure economic benefits of trade liberalization on smallholder farmers. Using coefficient of variation of the level of prices (CV) and corrected coefficient of variation (CCV) as measured by Huchet-Bourdon (2011) we found that the values of both CV and CCV for consumer price in the post-liberalisation were quite large suggesting greater volatility of consumer price of rice in Bangladesh and maize in Tanzania in the post-liberalization period. We conclude that price volatility diminishes the potential benefits of agricultural trade liberalization forsmallholder farmers who are net-deficit producers, net-deficit sellers and recommend supplementary policy interventions to achieve enhanced welfare from trade liberalization.

The Paradox of Agricultural Trade Liberalization in Bangladesh and Tanzania

This paper examines some of the contradictions and theoretical ambiguities of agricultural trade liberalizationon the welfare of smallholder farmers. Using production, consumption and price data for pre-and post-liberalization periods for two main agricultural crops from Bangladesh (rice) and Tanzania (maize) we critically analyse the correlation between domestic and international prices of rice in Bangladesh and maize in Tanzania to estimate impact of agricultural trade liberalization on price stability/volatility and food security to measure economic benefits of trade liberalization on smallholder farmers. Using coefficient of variation of the level of prices (CV) and corrected coefficient of variation (CCV) as measured by Huchet-Bourdon (2011) we found that the values of both CV and CCV for consumer price in the post-liberalisation were quite large suggesting greater volatility of consumer price of rice in Bangladesh and maize in Tanzania in the post-liberalization period. We conclude that price volatility diminishes the potential benefits of agricultural trade liberalization forsmallholder farmers who are net-deficit producers, net-deficit sellers and recommend supplementary policy interventions to achieve enhanced welfare from trade liberalization.

Environmental Impact of Agricultural Trade Liberalization under NAFTA

Fifteen years after its implementation, the North American Free Trade Agreement has been subject to evaluations from different perspectives, including environmental assessments. According to the Commission for Environmental Cooperation (CEC), results of these evaluations show that at the aggregate level, the environmental impacts of free trade are marginal. This article presents relationships between corn trade and environment through an ex post evaluation. I show a quantification of the land‐use change and connections with deforestation and biodiversity loss in Mexico, as poor farmers expanded their agricultural activity into marginal forest and jungle areas to compensate for lost income. I also analyze the impact on land‐use change in the United States resulting from increased corn exports to Mexico.Related Articles: Ibarrarán. 2007. “Climate Change Research and Policy in Mexico: Implications for North American Security.”http://onlinelibrary.wiley.com/doi/10.1111/j.1747‐1346.2007.00080.x/abstractVanNijnatten. 2007. “The Security and Prosperity Agreement as an ‘Indicator Species’ for the Emerging North American Environmental Regime.”http://onlinelibrary.wiley.com/doi/10.1111/j.1747‐1346.2007.00079.x/abstract?userIsAuthenticated=false&deniedAccessCustomisedMessage=Related Media: Annan. 2005. “Message of Kofi Annan.”http://www.maweb.org/en/Videos.aspxMillennium Ecosystem Assessment. 2005b. “Ecosystems and Human Well‐being.”http://www.millenniumassessment.org/documents/document.356.aspx.pdfQuince años después de su implementación, el TLCAN ha sido sujeto a muchos estudios desde diferentes perspectivas, incluyendo evaluaciones ambientales. De acuerdo con la Comisión para la Cooperación Ambiental (CCA), los resultados de estas evaluaciones muestran que a un nivel agregado los impactos ambientales del libre comercio son marginales. Este artículo presenta la relación entre el comercio de maíz y el medio ambiente a través de una evaluación ex post. Se muestra una cuantificación del cambio de uso de suelo y su conexión con la deforestación y la pérdida de biodiversidad en México; a medida que agricultores de escasos recursos expandieron sus actividades agrícolas hacia los márgenes de áreas con bosques y selvas para compensar pérdidas en su ingreso. También se analiza el impacto de un cambio en el uso de suelo en los Estados Unidos como resultado de un aumento en las exportaciones de maíz a México.

Globalization, Labour Market Segmentation, Unemployment and Wage Inequality: A Theoretical Analysis

In this paper we build up a three-sector general equilibrium framework to examine impact of agricultural trade liberalization, tariff rate restructuring and inflow of Foreign Direct Investment on unemployment and wage inequality in an emerging market economy. The paper shows that agricultural trade liberalization and tariff rate restructuring reduces the skilled-unskilled wage gap whereas increase in inflow of foreign capital may lead to worsening of income distribution. Multiple cross effects, factor specificity and factor intensity ranking play important roles in determining changes in output composition, factor rewards and unemployment in the wake of economic reforms.

Scambi commerciali agricoli e accordi di partenariato tra Unione Europea e Africa

- The Cotonou Partnership Agreement, signed on 2000, marks the beginning of a new cooperation phase between acp countries and the eu. The iv pillar of the Agreement, aimed at the creation of a free trade area, concerns the economic and trade cooperation and is targeted to make trade in line with the wto rules and to allow the acp countries a full participation to international trade understood as strategic condition for supporting growth and development. In this context, the trade relationships between the eu and Africa are of specific importance when referred to agricultural products. The liberalization process might have a significant impact for the eu as leading world exporter and importer of agricultural goods and the wider destination and origin market of the African food and agricultural products. On the African side, agricultural export are often the primary source of foreign exchange for food imports required for domestic food security. Furthermore, the new Partnership Agreement creates an additional market access only for the agricultural products that, however, might results strongly constrained by the limited supply potential and high eu sps standards. Thus, the analysis of the costs and benefits connected to the liberalization process in both the eu and Africa is relevant for a better understanding of the forthcoming competitive scenario for the agricultural products. This is the topic of the paper that, with reference to the time period from 1995- 2006, provides a preliminary analysis of the main features of the agricultural trade flows between the eu-25 and Africa; the competitive potential of the sector; the explanatory variables of the African export flows trends to the eu-25. Despite the eu is negotiating an Agreement with the African countries as a whole, the analysis also distinguishes among geographic areas in order to estimate the likely different impact of agricultural trade liberalization. To the same aim food and agricultural product are considered separately.JEL Codes: Q17 - Agriculture in International TradeKey words: agricultural trade, trade and development, agricultural competitiveness

The Consequences of Agricultural Trade Liberalization for Developing Countries: Distinguishing Between Genuine Benefits and False Hopes

Recent analyses suggest that the impact of agricultural trade liberalization on developing countries will be very uneven. Some simulations suggest that the effects of agricultural trade liberalization will be small, overall, and are likely to be negative for a significant number of developing countries. The Doha Round focuses on tariff issues, but these countries currently have practically duty-free access to European and North American markets under preferential regimes. Multilateral liberalization will erode the benefits of these preferences, which are presently rather well utilized in the agricultural sector. The main obstacles to the exports of sub-Saharan African and least developed countries appear to be in the non-tariff area (sanitary, phytosanitary standards) which increasingly originate from the private sector and are not dealt with under the Doha framework (traceability requirements, etc.). An agreement in Doha is unlikely to solve these problems and open large markets for the poorest countries. It might even increase their handicap relative to developing countries that are more advanced from a technical and commercial standpoint. While this is not an argument to give up multilateral liberalization, a more specific and differentiated treatment should be considered in WTO rules, and corrective measures should be implemented.

The consequences of agricultural trade liberalization for developing countries: distinguishing between genuine benefits and false hopes

Recent analyses suggest that the impact of agricultural trade liberalization on developing countries will be very uneven. The Doha Round focuses on tariff issues, but some developing countries currently have practically duty-free access to European and North American markets under preferential regimes. Multilateral liberalization will erode the benefits of these preferences, which are presently rather well utilized in the agricultural sector. While South American and East Asian countries should benefit from an agricultural agreement, African and Caribbean countries are unlikely to do so. The main obstacles to the exports of the sub-Saharan African and Least Developed Countries appear to be in the non-tariff area (sanitary, phytosanitary standards), which increasingly originate from the private sector and are not dealt with under the Doha framework (traceability requirements, etc.). An agreement in Doha is unlikely to solve these problems and open large markets for the poorest countries. While this is not an argument to give up multilateral liberalization, a more specific and differentiated treatment should be considered in WTO rules, and corrective measures should be implemented.

Tariff rate quotas and the economic impact of agricultural trade liberalization in the world trade organization

Since their implementation at the Uruguay Round, tariff rate quotas (TRQs) have become a widely used instrument of trade policy in agricultural trade. With almost 1,300 TRQs scheduled at the World Trade Organization, this paper will examine their economic effects more closely. First, the theoretical background of TRQs is examined. Then, a short overview of the Uruguay Round and their institutional background is given. We demonstrate that official statistics, which do not count TRQs as nontariff barriers, are at least highly misleading. Very often, their effects are the same as those of regular quotas, including redistributive effects. The prominent example of the European banana regime is used to illustrate all of these points.

Agriculture, trade, and the environment: discovering and measuring the critical linkages

Introduction Introduction (Maury E. Bredahl, Nicole Ballenger, and John C. Dunmore. ) Discovering The Critical Linkages: Trade, International Institutions And The Environment Trade and the Environment: Exploring the Critical Linkages (Jagdish Bhagwati. ) Trade and Environment: A Tale of Two Paradigms (Howard Gruenspecht. ) GATT From the Trenches (Amb. Michael B. Smith. ) Competitiveness, Harmonization, and the Global Ecolonomy (Steve Charnovitz. ) Environmental Side Agreements: Will They Take Center Stage? (N. Ballenger and Barry Krissoff. ) Discovering The Critical Linkages: Trade, Renewable Resources And International Environmental Goods International Dimensions of Environmental Policy (G. M. Heal. ) Property Rights and the Dynamics of North-South Trade (Graciela Chichilnisky. ) Environment, Welfare and Gains from Trade: A North-South Model in General Equilibrium (Xinshen Diao and Terry L. Roe. ) Quantifying Trade and Environment Linkages Through Economywide Modeling (John Whalley. ) Measuring The Critical Linkages On Measuring the Environmental Impact of Agricultural Trade Liberalization (Kym Anderson and Anna Strutt. ) Empirical Foundations for Environment-Trade Linkages: Implications of an Andean Study (John M. Antle, Charles C. Crissman, R. Jeff Wagenet, and J. L. Hutson. ) Environmental Policies in Europe and the Effect on the Balance of Trade (Jan C. Blom. ) Environmental Regulation and the Competitiveness of U.S. Agriculture (Bruce L. Gardner. ) Trade Implication of the EU Nitrate Directive: An Emerging Research Priority (Dale Leuck and Stephen Haley. ) International Environmental Indicators: Trade, Income, and Endowments (Robert E.B. Lucas. ) Key Questions And Research Needs Key Questions (David E. Ervin and Vivian Noble Keller. ) Research Needs (Gerald C. Nelson. ) Reflections on Research Needs (Cathy Roheim Wessells.)