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on International Trade |
| By: | Dutt, Pushan (INSEAD, Singapore); Santacreu, Ana Maria (Federal Reserve Bank of St. Louis); Traca, Daniel (Universidade NOVA de Lisboa, Portugal) |
| Abstract: | In this paper, we establish the importance of experience in international trade for reducing trade costs and facilitating bilateral trade. Within an augmented gravity framework, we find that an additional year of experience at the country-pair level reduces trade costs by 2.0% and increases bilateral exports by 8%. The effect of experience is stronger for country-pairs that are more distant, who do not share a common border, and who lack colonial and legal ties. Further, experience raises both the extensive and the intensive margins of trade. In a dynamic trade model with heterogeneous firms and where export-experience reduces trade costs, our empirical results imply that benefits of experience are shared industry-wide and that experience lowers the variable component of trade costs. |
| Keywords: | Gravity model; Trade costs; Experience; Extensive and intensive margin. |
| JEL: | F10 F14 |
| Date: | 2014–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2014-041&r=int |
| By: | Mujahid, Irfan; Kalkuhl, Matthias |
| Abstract: | In addition to multilateral trade agreements under the World Trade Organization (WTO), the world has seen a remarkable proliferation of regional trade agreements (RTAs) in the last two decades. This study investigates the impacts of these multilateral and regional trade institutions on food trade. The Gravity model of international trade is used for the empirical analysis. The model is developed in a large panel data setting and attempted to address some potential problems in the estimation including multilateral trade resistances, zero trade values and endogeneity. The results suggest that both the WTO and RTAs have delivered significant positive effects on trade, but only RTAs are found to have succeeded in increasing food trade among the members. However, although on average the WTO has negative implications on food trade, it has facilitated the developing countries more than the developed countries. |
| Keywords: | food trade, food security, WTO, regional trade agreement, Agricultural and Food Policy, Food Security and Poverty, International Development, International Relations/Trade, F13, F14, O13, Q17, Q18, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170159&r=int |
| By: | Shao, Qianqian; Punt, Maarten; Wesseler, Justus |
| Abstract: | The EU and the US launched negotiations on a Transatlantic Trade and Investment Partnership (TTIP) in July 2013. Among the TTIP aims, there are negotiable terms under which the EU would import more genetically modified (GM) products and change its labeling regulations on GM Organisms (GMOs). This paper discusses a trade agreement of agricultural products between two countries, with different GM regulatory regimes from a political economy perspective. We find the negotiation equilibrium of the GMO Trade Agreement and compare it with a stricter trade policy. We find that if the trade agreement leads to a lenient GM regulation, lobbying intensifies. However, this effect is moderated if there are exports of non-GM products. |
| Keywords: | Political Economy, GMOs, international trade, Agricultural and Food Policy, International Relations/Trade, Political Economy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170047&r=int |
| By: | DJEMMO FOTSO, Arnaud |
| Abstract: | Analyzing some trade indicators and estimating a gravity model, this paper assesses the potential effects of an effective implementation of the ECCAS FTA. Launched since January 2004, the ECCAS FTA is not yet established: the main reforms that should be undertaken by the various members are still awaited. The results show that the potential for increasing intra-ECCAS trade, following the FTA, is limited by the narrow range of goods produced and exported by members; the fact that members have comparative advantages for similar products in which they are not important consumers; and the low complementarity in their trade profiles. To accelerate industrial development through a pooling of productive resources and capacities could improve the complementarity of the production structures in the sub-region and thus, increase the possibilities of intra-industry trade, key of intra-trade growth in model FTA. |
| Keywords: | ECCAS, Gravity model, Free Trade Area, Intra-regional trade, trade indicators. |
| JEL: | F14 F15 |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59863&r=int |
| By: | Hess, Sebastian |
| Abstract: | The global trend of agro-industrialisation is increasingly transforming farms and firms into specialist component suppliers within a multi-stage food processing chain. The trade-in-tasks theory predicts in this context that declining costs for cross-country outsourcing of certain stages of the production process (tasks) generates intra-industry trade and may increase the competitiveness of the final product. Based on this theory, a conceptual framework was established and empirically applied to the EU27 pig industry. The results suggest that the average EU country could increase the competitiveness of its processed meat exports; one potential source of these gains can be structural change among pig farms in other EU countries, which is utilized through vertical intra-industry trade in live pigs. In contrast, changes in outsourcing costs since 2002 due to changes in EU membership or due to the adoption of the Euro appeared non-significant in panel regressions. |
| Keywords: | Outsourcing, Trade-in-Tasks, Intra-Industry Trade, Structural Change, Livestock Production/Industries, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi14:187438&r=int |
| By: | Dyck, John; Arita, Shawn |
| Abstract: | Japan’s agriculture has been inward oriented, protected by trade barriers from foreign competition. Even though the share of Japan’s food consumption provided by Japanese production has gradually fallen, Japan’s farm sector remains the second-largest among the countries negotiating the Trans-Pacific Partnership (TPP). Japan’s food industry is increasingly integrated with TPP economies, although the TPP share of Japan’s agricultural imports has fallen over time. The proposed TPP agreement would lead to more agricultural exports to Japan from TPP partners, likely dominating the total agricultural trade impact of such an agreement. Despite potentially large import increases, especially in the rice, beef, and dairy sectors, the proposed agreement would only marginally reduce Japan’s output. Intrinsic strengths of Japanese agricultural production and constraints to the growth of supply in the rest of the TPP countries may limit the impact of the agreement on Japan’s agriculture. Nevertheless, U.S. exports would be well positioned to meet Japan’s new import demand. |
| Keywords: | Japan, trade, trade agreement, trade liberalization, Trans-Pacific Partnership, TPP, Pacific Rim, Japanese agriculture, Japanese agri-food sector, product differentiation, Agribusiness, Agricultural and Food Policy, International Relations/Trade, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersib:188127&r=int |
| By: | Chunding Li; John Whalley |
| Abstract: | FTA bilateral and regional negotiations in Asia have developed quickly in the past decade moving Asia ever closer to an economic union. Unlike Europe with the EU and the 1997 treaty of Rome and the 1993 NAFTA in North American, Asian economic integration does not involve a comprehensive trade treaty, but an accelerating process of building one bilateral agreement on another. For countries in Asia there is negotiation of a China-Japan-Korea agreement, a China-India agreement, a Trans-Pacific Partnership (TPP) agreement, and a Regional Comprehensive Economic Partnership (RCEP). This paper uses a fifteen-country global general equilibrium model with trade costs to numerically calculate Debreu distance measures between the present situation and potential full Asia integration in the form of a trade bloc. Our results reveal that these large Asia economies can be close to full integration if they act timely in agreements through negotiation. All Asia countries will gain from Asia trade bloc arrangements except when the Asia FTA can only eliminate tariffs. These countries' gain will increase as bilateral non-tariff elimination deepens. Larger countries will gain more than small countries. Asia FTA, Asia Union and RCEP will benefit member countries more than ASEAN+3. Global free trade will benefit all countries the most. |
| JEL: | D58 D61 F15 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20424&r=int |
| By: | Braha, Kushtrim; Qineti, Artan; Smutka, Lubos; Matejková, Eva; Pietriková, Miriam |
| Keywords: | International Relations/Trade, |
| Date: | 2014–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa142:168926&r=int |
| By: | Heerman, Kari E.R. |
| Abstract: | I introduce a novel general equilibrium framework for agricultural trade policy analysis with heterogeneous producers in which agro-ecological characteristics in uence patterns of specialization within the sector and trade costs are product-specific. This induces substantial variation in market share elasticities with respect to trade costs, with the largest magnitude elasticities between countries most likely to compete head-to-head in the same products. The model is thus able to generate more nuanced predictions for how bilateral agricultural trade and production patterns shift in response to changes in policy than existing models. I draw on techniques pioneered in the discrete choice literature to estimate parameters that describe the distribution of productivity and trade costs across products. This approach has the considerable advantage of allowing me to solve a product-level conceptual model with little data beyond what is used in a standard gravity model. This framework promises to allow researchers to make more informed predictions for how global agricultural trade and production patterns shift in response to policy change. |
| Keywords: | Agricultural Trade, Gravity, Trade Costs, Discrete Choice, Productivity, Comparative Advantage, Agricultural and Food Policy, International Relations/Trade, Research Methods/ Statistical Methods, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170083&r=int |
| By: | Di Comite, Francesco; Thisse, Jacques-François; Vandenbussche, Hylke |
| Abstract: | Many trade models of monopolistic competition identify cost efficiency as the main determinant of firm performance in export markets. To date, the analysis of demand factors has received much less attention. We propose a new model where consumer preferences are asymmetric across varieties and heterogeneous across countries. The model generates new predictions and allows for an identification of horizontal differentiation (taste) clearly distinguished from vertical differentiation (quality). Data patterns observed in Belgian firm-product level exports by destination are congruent with the predictions and seem to warrant a richer modelling of consumer demand. JEL Classification: D43, F12, F14, L16 |
| Keywords: | asymmetric preferences, heterogeneous consumers, heterogeneous firms, monopolistic competition, product differentiation |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141680&r=int |
| By: | Ellero, Jeremy; Lagadec, Gael |
| Abstract: | When the framework of the General Agreement on Tariffs and Trade (GATT) was created in 1947, the aim was to build a negotiation structure to regulate the liberalisation of trade and remedy protectionist measures. Fifty years on from its creation, the World Trade Organisation (WTO) includes 159 countries, has accompanied developments in free trade and remains the reference forum for settling trade disputes. However, the failure of the Doha Round in 2008 highlighted the failings of the decision-making mechanism and its inability to span all the different areas of trade. The Multilateral Trading System (MTS) is undergoing profound change and seems to be seeing a regional fragmentation of its spheres of influence. In this context, the initiative of the PICTA and PACER agreements would appear to be the first step towards the construction of a regional single market in the Pacific. Oceania represents a market of seven million consumers scattered over one-third of the surface area of the globe. Against a backdrop of gradual political emancipation, New Caledonia and French Polynesia must now re-examine the prospects for regional cooperation. However, the institution of a free trade zone via adoption of the PICTA and PACER agreements raises questions as to the very economic foundations of the French territories. Geographical isolation, lack of commercial openings and the heterogeneous nature of the Pacific Island economies have a direct influence on commercial policies. Given the nature of trade between the Pacific islands, any genuine stimulation would appear to be out of the question. The real stakes in trade integration in the Pacific would seem to lie in trade in services and the free movement of workers. While more than 40% of global trade is governed by around 170 bilateral and regional trade agreements, the development of the Pacific Island economies seems to be fundamentally compatible only with the establishment of a bespoke regional union. |
| Keywords: | free-trade zone, regional integration, French Pacific territories, PICTA, PACER. |
| JEL: | F40 |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60016&r=int |
| By: | Josling, Tim; Paggi, Mechel; Wainio, John; Yamazaki, Fumiko |
| Abstract: | Latin American and Caribbean (LAC) countries have been among the most active participants in the negotiation of regional and bilateral FTAs. The countries of the region are members of 73 of the 259 FTAs notified to the WTO as currently in force, with 29 of these agreements containing tariff concessions made to one or more Latin American partners: the remaining 44 are between an LAC member country and a third country. Among LAC countries already linked by an FTA, a large percentage of agricultural tariffs are already duty free. But the progress in this direction seems to have stalled, with continued tensions in MERCOSUR and political difficulties in the Andean Community. Negotiation of the proposed Free Trade Areas of the Americas (FTAA) has been shelved, and the MERCOSUR-EU negotiations are moving at an imperceptible speed. Meanwhile other countries are moving ahead rapidly by negotiating ambitious mega-agreements, particularly the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (T-TIP). The only LAC countries actively involved in the TPP talks are Mexico, Chile, and Peru. If either or both of these mega-agreements are concluded the impacts on the region could be significant. These impacts include trade diversion and preference erosion in major import markets, as competitors improve their market access. They could also involve the 3 de facto acceptance of regulatory decisions made by the mega-agreement partners. The Latin American strategies toward these potentially significant agreements and the impacts of the TPP and T-TIP on Latin American agriculture have so far gone largely unstudied. Several possible avenues exist for Latin American countries to counter the impact of a TPP and TTIP on agricultural exports. One possible avenue would be to strengthen existing bilateral trade agreements within the region and to rely on multilateral trade negotiations to improve market access in other regions. Another possible strategy would be to link existing multi-country agreements, such as MERCOSUR and the Pacific Alliance, to NAFTA, in effect reviving the idea for a Free Trade Area of the Americas (FTAA) under a different structure. Another possibility would be to complete and expand the scope of the MERCOSUR-EU FTA talks, to include other LAC countries. A fourth possible action would be for those countries that are not yet part of the negotiations to “sign on” to the TPP in so far as it is an “open access” agreement. |
| Keywords: | International Relations/Trade, Political Economy, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:177181&r=int |
| By: | Ottaviano, Gianmarco I. P. |
| Abstract: | This chapter discusses whether and how 'new quantitative trade models' (NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed the potential of being used to supplement traditional 'computable general equilibrium' (CGE) analysis thanks to their tight connection between theory and data, appealing micro-theoretical foundations, and enhanced attention to the estimation of structural parameters. On the other hand, further work is still needed in order to fully exploit such potential. |
| Keywords: | Gains from trade,European integration,Quantitative trade models,Gravity equations,Structural estimation |
| JEL: | F10 F15 F17 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:470&r=int |
| By: | Debnath, Deepayan; Thompson, Wyatt; Helmar, Michael; Julian, Binfield |
| Abstract: | Developing countries now buy a larger share of U.S. agricultural exports than developed countries, and this new pattern of agricultural trade can have implications for the elasticity of U.S. export demand. This research estimates whether the U.S. export demand is becoming more price elastic or inelastic. A multi-market, multi-region partial equilibrium model is used to estimate the U.S. export demand for corn and wheat for the current crop year 2014/15 and projected year 2022/23. U.S. export demand for wheat is more elastic as compared to corn in the base period, suggesting that with the growing role of more price sensitive consumers in developing countries as well as the large share of the U.S. in corn markets. Export demands are found to become less elastic, or even inelastic, over a ten-year projection period if income growth is steady. Results support non-constant elasticities in medium- or long-run analysis, such as might be required for climate or food security research. |
| Keywords: | agricultural trade, elasticities, export demand, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade, Q17, Q18, |
| Date: | 2014–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170490&r=int |
| By: | Yang, Tsung Yu |
| Keywords: | Pollution Haven Hypothesis, FDI, Environmental Economics and Policy, International Development, International Relations/Trade, Political Economy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170054&r=int |
| By: | Pradhan, Jaya Prakash; Zohair, Mohammad |
| Abstract: | Traditionally, the export performance of the economies were analysed taking individual countries as the locational unit, which were not able to explain the subnational, regional or spatial disparities within the geographically vast countries like India, because huge amount of heterogeneity exist among different states in terms of economic development, infrastructure, skill, knowledge and subnational policies. The analysis of the two selected states, namely Uttar Pradesh and Tamil Nadu indicates that their differential performance in manufacturing exports can be related to their contrasting heterogeneity in terms of above spatial factors. Findings also suggest that firms’ exporting in these two states are shaped by a number of firm level parameters such as firm age, firm size, R&D intensity, foreign and business group affiliation, etc. |
| Keywords: | Subnational Exports; spatial factors; India |
| JEL: | F10 O53 R10 |
| Date: | 2014–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60029&r=int |
| By: | Jaime de MELO (Ferdi); Armela MANCELLARI (FERDI) |
| Abstract: | Liberia intends to deepen its participation in Economic Community of West African States (ECOWAS) by adopting the common external tariff (CET) of the Customs Union (CU). This implies that Liberia will have to modify its tariff structure to be much closer to the (yet unknown because of upcoming demands for exceptions to the schedule and demands for reclassification of goods) CET of the CU. This implies that Liberia will have to modify its tariff structure to be much closer to the (yet unknown because of upcoming demands for exceptions to the schedule and demands for reclassification of goods) CET of the CU. This report is in response to the Government of Liberia’s request to the International Growth Centre to estimate the likely effects of this change, particularly on households’ well-being and on government revenue. This paper was prepared by the IGC at the request of the Government of Liberia. A full version with annexes is available at: http://www.theigc.org/sites/default/file/Regional%20and%20Global%20Trade%20Strategies%20for%20Liberia.pdf. The authors thank Mounir Siaplay, IGC Liberia in-country Economist, and John Spray, ODI Fellow at the Ministry of Commerce and Industry (MOCI) of Liberia for support. We also thank Ibrahim Stevens, Eric Werker, participants at the WTO Technical Workgroup meeting on October 10th 2013, as well Hon. Minister Axel Addy, MOCI, Deputy Minister Steve Marvie, MOCI, and Deputy Minister Candance Eastman, MOCI for their valuable comments and insights. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:1590&r=int |
| By: | Serena Frazzoni; Maria Luisa Mancusi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Zeno Rotondi; Maurizio Sobrero; Andrea Vezzulli |
| Abstract: | This paper assesses the role of relationship lending in explaining simultaneously the innovation activity of Small and Medium Enterprises (SME), their probability to export (i.e. the extensive margin) and their share of exports on total sales conditional on exporting (i.e. the intensive margin). We adopt a measure of informational tightness based on the ratio of firm’s debt with its main bank to firm’s total assets. Our results show that the strength of the bank-firm relation has a positive impact on both SME’s probability to export and their export margins. This positive effect is only marginally mediated by the SME’s increased propensity to introduce product innovation. We further discuss the financial and non-financial channels through which the intensity of bank-firm relationship supports SMEs’ international activities. |
| Keywords: | margins of export, bank-firm relationships, innovation, localized knowledge spillovers |
| JEL: | F10 G20 G21 O30 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def18&r=int |
| By: | Sunitha Raju (Indian Institute of Foreign Trade, New Delhi, India) |
| Abstract: | The increased trade in agricultural value added products has internationalized production and marketing systems. As such, a variety of forms of value chain relationships have emerged (outgrower schemes, contract farming, marketing contracts etc.) that have replaced the arms length market relationships between buyers and suppliers. The application of the Global Value Chain framework as also Production Networks to agriculture has gained significance particularly considering the importance of promoting agricultural exports from developing countries. As agriculture in most of the developing countries, as also in India, is dominated by small and medium farms, poverty reduction through exports would require production shifts and access to the global agribusiness. In recent years, the market requirements of agribusiness products have become challenging for three reasons. First, the importance of standards is increasing in global agricultural trade. Meeting the requirements of stringent food safety conditions has become complex as monitoring is required the way products are grown, harvested, processed and transported. Second, the demands of global buyers in terms of large-volume supply, speed and reliability of delivery, customization through processing and packaging and product safety guarantees have emerged as challenges for small producers. And, third, strategies for product differentiation particularly for traditional exports involved certification and/or closer links between producers, traders, processors and retailers. In meeting these challenges, organizing agribusiness value chains or integrated supply chains is necessary for global competitiveness. The Indian agri business is largely unorganized at the production, trading and consumer levels and with trade and retailing gaining importance, structural shifts in agribusiness are taking place. With exports increasing, many food chains and companies are sourcing agricultural products from India to feed their outlets in different parts of the world. Similarly, under organized retailing, several channels of procurement have developed to ensure efficiency in the value chain. Under these evolving conditions, the paper addresses the following contextual issues: Value chain linkages and coordination costs of buyer-seller relationships Information codification and transmission along value chain and supplier competence Channels of procurement of different products by food retailers Public private partnership in developing market, transportation and logistic infrastructure Building supplier competencies of the producer particularly small farmers The application of the GVC has underlined three important issues. First, with globalization and expansion of agricultural trade, India is still an insignificant part of the global production network. Though India has a comparative advantage in the production of many agricultural products, this is being undermined by the high transaction costs arising out of inefficiencies in distribution and logistics. But, considering that the market, transportation and logistics infrastructure is less developed in India and the public investments in the same being low, the policy approach should be to encourage investments by the transnationals in setting up the value chain and strengthening the support institutions like inspecting and testing facilities, certification companies, local consultancy etc. Overall, the effort should be to ensure a conducive economic environment for integrating India into global agricultural production networks. The second important issue emerging out of the GVC analysis is the development of domestic retailing in building the capacities of the local firms for forging international operations. The development of organized retailing, particularly in the urban areas, provides the ‘threshold expertise’ to organize and coordinate supply activities for greater efficiencies. Leveraging the domestic operations for entering into global markets requires development of infrastructure and support institutions. And, lastly, the third important issue arising out of the GVC analysis is the effect of trade in building the supply competencies of the producer, particularly the small farmers. The costs of compliance being high, the role of state in providing the Standards infrastructure becomes crucial. Adopting new technologies and production processes by the farmers is not scale neutral and therefore, can have the tendency of excluding the small farmers. In providing this technical assistance, NGOs, international development organizations and public organizations can cooperate and extend necessary support. |
| Keywords: | Global Value Chains, Indian Food Sector, International Trade. |
| JEL: | Q |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ift:wpaper:1023&r=int |
| By: | Philipp M. Richter; Greta F. Schäffer |
| Abstract: | A short name is causing a lasting debate: TTIP [ti:t|p]. Ever since the beginning of the negotiations in the summer of 2013, media coverage of the planned Transatlantic Trade and Investment Partnership between the EU and the US has contributed to a critical debate on the topic. In doing so, difficulties have arisen in differentiating factually substantiated arguments from one-sided statements. TTIP is a planned agreement on free trade and investment between the US and the EU, whose details are currently under negotiation. Advocates expect a stimulus on economic growth, new jobs and a strengthening of the transatlantic community of values. Critics point to the lack of transparency in negotiations; they fear an erosion of standards and consumer protection, and see a potential loss of national sovereignty. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:42en&r=int |
| By: | Zongo, Jean-baptiste Wendkouni; Lee, Huey-Lin; Hsu, Shih-Hsun; Chang, Ching-Cheng |
| Abstract: | International prices of most staple food commodities in 2008 reached a remarkable level that had not been seen since late 1970’s. Food commodity prices are projected to remain on higher levels over the next decade, supported by firm demand, unfavorable weather conditions, slowing growth in global production, expected high price of crude oil. This perspective poses not only challenges to global food insecurity but also offers opportunities for food and agricultural producers arising from the higher average prices projected for the coming decade. This paper attempted to investigate the impact of future global food price increase on 28 Africa least developed countries (LDCs) and to propose some policy instruments for tackling the impact of high food prices. Unlike most conventional studies on agricultural impact of trade, we chose in this study the Common Agricultural Policy Regionalized Impact (CAPRI in abbreviation, see Britz & Witzke, 2012) modeling system as the analytical tool. The market module of CAPRI is a multi-regional partial equilibrium model for agricultural products that covers 47 primary and secondary agricultural products produced in 77 countries of 40 trade blocks in the world, among which 28 individual African countries are accounted for, and the remaining African countries being aggregated into four trade blocks—namely, Africa-Rest, Nigeria, Ethiopia and South Africa. This study is, to our knowledge, thus far the very first application of the CAPRI modeling system to assess price surge and policy impact on African LDCs. Based on the parameters as estimated by Haniotis and Baffes (2010), we translated the projected oil price increase in the medium run (5 to 10 years) into agricultural commodity price changes in the global market. Oil price rise affects agricultural product prices in both production and demand sides. Energy is needed for fertilizer production and thus higher energy prices would push up fertilizer production costs. This would in turn lead to increases in agricultural production costs. On the demand side, as the price of crude oil increases, some crops are used as inputs for producing biofuel so as to substitute for crude oil, and thus push up the demand for grains (Mueller, Anderson and Wallington, 2011). Our simulation results indicate that African LDCs are adversely affected in terms of overall welfare when prices of maize, rice and wheat increase. The reduction in consumer surplus, agricultural income and tariff revenues are the key factors for the reduced overall welfare. The sectoral impact analysis reveals that total demand for wheat and rice, including both human consumption and imports, would drop as a result of substitution effect, yet maize demand could increases. In addition, African LDCs are projected to be more negatively affected than the other trade blocks such as Africa-Rest, Nigeria, South-Africa and Ethiopia. Important policy implications follow our findings. Regarding the adverse effects that international food price spike may have on the welfare of African LDCs, governments could invest to develop the wheat, rice and maize sectors in order to reduce the countries’ vulnerability to international shocks. Bilateral cooperation between African and Western countries should be more oriented toward transfer of technology, knowledge and managerial skills. Poor transportation could magnify import prices, and also impede the distribution of products between production zones and consumption areas within and out of the country. Improving transportation logistics and infrastructure would be helpful in reducing costs of food transportation to African LDC consumers. In addition, policies that promote for more diversified agricultural income sources, such as earnings from livestock and fishing, can help farmers withstand the unfavorable impact of agricultural price fluctuations on African LDCs. |
| Keywords: | CAPRI, African LDCs, global food price, food security, welfare analysis, Food Security and Poverty, International Relations/Trade, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:171626&r=int |
| By: | Zhang, Lisha; Seale, James L. Jr. |
| Abstract: | This paper studies the relationship among domestically produced and imported melons and vegetables (i.e., fresh onions, fresh tomatoes, spinach, oranges and cantaloupes). The U.S import expenditure, quantity, and price data are collected from the Economic Research Service (ERS). U.S. vegetables and melons consumption data are also collected from ERS. In method one, under the assumption of the separability between domestic and foreign goods, we fit the Rotterdam model to the import data for the selected commodities by country of origin. Conditional import expenditure and price elasticities are calculated. In method two, the same commodities are used as in method one, but consumption of the U.S. produced commodities are included with the imported ones. However, the practical application of this method leads to fewer imported goods from countries of origin. Again the Rotterdam model is fit to the data and conditional expenditure and price elasticities are calculated. Also in this section, we test for weak separability between the domestically produced good and the imported ones. The third method formulates the problem in two-stage procedure. In the first stage, a Rotterdam model is fit to the U.S. domestic consumption data and to total imports of the good. It consists of two equations, demand for the domestically produced good and demand for the imported good as a whole. In the second stage, total import expenditure is allocated among the different country sources. For each stage, conditional expenditure and price elasticities are calculated. Those of the second stage are directly comparable to method one. By proper multiplication between the elasticities of stages one and two, conditional elasticities are calculated that are directly comparable to those of method two. |
| Keywords: | Import Demand, Rotterdam Model, Two-Stage Model, Demand and Price Analysis, International Relations/Trade, |
| Date: | 2014–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170616&r=int |
| By: | Xiong, Bo; Sumner, Daniel; Matthews, William |
| Keywords: | olive oil, countervail, Africa, Agricultural and Food Policy, International Development, International Relations/Trade, Q11, Q17, F14, |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170619&r=int |
| By: | Suh, Dong Hee |
| Keywords: | Demand and Price Analysis, Food Security and Poverty, International Relations/Trade, Livestock Production/Industries, Production Economics, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169829&r=int |
| By: | Gene M. Grossman; Elhanan Helpman |
| Abstract: | We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated product and a random technology for producing it. Technologies differ in complexity and productivity, and technological sophistication is complementary to worker ability. We study the co-determination of growth and income inequality in both the closed and open economy, as well as the spillover effects of policy and conditions in one country to outcomes in others. |
| JEL: | D33 F12 F16 O41 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20502&r=int |
| By: | Debnath, Deepayan; Binfield, Julian; Whistance, Jarrett |
| Abstract: | Recently, the Environmental Protection Agency (EPA) proposed biofuel requirements for 2014 that suggest the use of ethanol would probably be lower than the volume previously envisioned in the Energy Independence and Security Act (EISA) of 2007. The impact of waiving down the mandate in the U.S., and shrinking the “advanced gap” will mean that both the U.S. and Brazil will export more to other countries. Given the flexibility the EPA has for setting policy, we analyze the impact of two alternative scenarios for mandate waivers on the U.S. domestic biofuel market and its implications for the world ethanol and biodiesel market: (1) overall mandate is waived down to a level which preserves the “advanced gap” at the levels envisioned in the RFS2; (2) overall mandate is achieved by expanding the biodiesel mandate is expanded from 1.28 billion gallons to 1.8 billion gallons. Increasing the advanced gap leads to both an increase in imports, but also an increase in exports of ethanol for the U.S., driven by the fact that the U.S. discriminates on the basis of feedstock where Brazil does not. |
| Keywords: | Global biofuels model, U.S. biofuels mandates, Demand and Price Analysis, International Relations/Trade, Resource /Energy Economics and Policy, Q42, Q48, |
| Date: | 2014–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:173301&r=int |
| By: | Harvey, David; Hubbards, Carmen; Majewski, Edward; Malak-Rawlikowska, Agata |
| Abstract: | The paper presents results of the FP7 Econ-Welfare Project “Assessing the socio-economic consequences of measures promoting good animal welfare”. The paper illustrates the economic consequences at the farm level of indicative improvements in animal welfare conditions for pigs and cattle and addresses the consequences of improved animal welfare for international trade and competitiveness1. For the farm level considerations costs - effectiveness analysis was applied, whilst impacts of the upgraded standards on international trade and competitiveness was assessed with the use of the partial equilibrium Agmemod model. The Belief Network Approach was used to determine the effects of animal welfare standards and labels on the competitiveness of the EU animal production and supply chain. Introducing upgraded Animal Welfare standards at the farm level would increase costs of production in pigs and beef cattle sectors. In dairy sector upgrading cows welfare standards results with higher benefits than costs. Accordingly, Agmemod results indicate that on the pork and beef markets international competitive position of the EU producers may be undermined. However, as the analysis showed, there are both supply conditions and demand side circumstances which may well resolve the apparent conflict between animal welfare and chain competitiveness. On the supply side, it is apparent that there are some animal welfare improvements that can be made without compromising competitiveness. Supply chain information, education and training may well be able to improve both animal welfare and competitiveness. In addition, better understanding of both animal welfare and animal productivity (through R&D) can be expected to lead to improvements in both objectives. |
| Keywords: | animal welfare, upgraded standards, cost and benefits, Agmemod, trade implications, competitiveness, chain., Agribusiness, Food Consumption/Nutrition/Food Safety, Industrial Organization, Research Methods/ Statistical Methods, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164746&r=int |
| By: | Holst, Carsten; von Cramon-Taubdel, Stephan |
| Abstract: | The accession of ten countries to the EU in May 2004, and of Bulgaria and Romania in January 2007, eliminated barriers to trade between old and new, and among new member states. We analyse the effects of this accession on the integration of pork markets in the EU. Our results show that the speed of price transmission is positively related to the volume of pork trade between two countries. Our results also reveal that intra-regional price transmission between old or between new member states is more rapid than inter-regional price transmission between old and new member states, and that producer prices in the new member states adjust more rapidly to price changes in the old member states than vice versa. Price transmission is also more rapid between Euro-zone members and member states that share a common border. Finally, our results show that the strengths of these effects have changed in predictable ways in the years since accession took place, as a single, increasingly integrated European pork market has evolved. |
| Keywords: | spatial price transmission, market integration, cointegration, European pork market, International Relations/Trade, Marketing, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi14:187598&r=int |
| By: | Kolev, Galina |
| Abstract: | Seit über einem Jahr verhandeln die EU und die USA über das größte Freihandelsabkommen der Geschichte – die beiden Regionen stehen für rund ein Drittel des Welthandels. Von der Transatlantischen Handels- und Investitionspartnerschaft (TTIP) wird die deutsche Wirtschaft aufgrund ihres hohen Offenheitsgrads erheblich profitieren. Für die deutsche Exportindustrie sind die USA weltweit Exportziel Nummer zwei - rund 8 Prozent der deutschen Warenexporte werden für den US-Markt hergestellt. Etwa 600.000 Arbeitsplätze hängen schätzungsweise direkt oder indirekt an den deutschen Warenexporten in die USA. Auf Bundeslandebene ergeben sich aber signifikante Unterschiede, sowohl hinsichtlich der Intensität der Verflechtung mit den USA als auch hinsichtlich der Struktur der Exporte. Die geschätzten ökonomi-schen Auswirkungen sind sowohl für die Verbraucher als auch für die Wirtschaft positiv. Sie ergeben sich aus einem Abbau der bereits recht niedrigen Zölle, was aber aufgrund des großen Handelsvolumens allein für den Industriewarenhandel Einsparungen von schätzungsweise 3,5 Milliarden Euro ermöglichen wird. Vor allem aber winken Wohlstandsgewinne durch die kostenreduzierende Verringerung von nicht-tarifären Barrieren (Unterschiede bei Regulierungen, Produktstandards), die im EU-US-Handel durchschnittlich wie ein Zoll von etwa 20 Prozent wirken. [...] |
| Keywords: | Exporte und Importe,Investitionen,USA,Welthandelsorganisation,Weltwirtschaft |
| JEL: | F13 F14 F16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkpps:112014&r=int |