Description:
The WTO’s Doha Development Agenda has generated demand for estimates of the potential economic consequences of global trade reform. Recent improvements in the GTAP dataset have provided a much better representation of tariff restrictions as of 2001. However, despite its use by most global trade modelers, substantial differences in results emerge from different computable general equilibrium exercises. To help understand these differences, this paper examines the sensitivity of full global and regional trade liberalization results from the GTAP model, using the GTAP version 6.1 database, to different assumptions about factor mobility, fiscal neutrality, macro-economic closure, and trade (Armington) elasticities.
Description:
Notwithstanding the tariffication component of the Uruguay Round Agreement on Agriculture, import tariffs on farm products continue to provide an incomplete indication of the extent to which agricultural producer and consumer incentives are distorted in national markets. Especially in developing countries, non-agricultural policies indirectly impact agricultural and food markets. Empirical analysis aimed at monitoring distortions to agricultural incentives thus need to examine both agricultural and non-agricultural policy measures including import or export taxes, subsidies and quantitative restrictions, plus domestic taxes or subsidies on farm outputs or inputs and consumer subsidies for food staples. This paper addresses the practical methodological issues that need to be faced when attempting to undertake such a measurement task in developing countries. The approach is illustrated in two ways: by presenting estimates of nominal and relative rates of assistance to farmers in China for the period 1981 to 2005; and by summarizing estimates from an economy-wide computable general equilibrium model of the effects on agricultural versus non-agricultural markets of the project's measured distortions globally as of 2004.
Description:
We provide economy-wide modelling results of the national and regional implications of two current challenges facing the Australian wine industry: a decline in export demand, and a possible change in the tax on domestic wine sales following the Henry Review of Taxation. The demand shock causes regional GDP to fall in the cool and warm wine regions, but not in the hot wine regions unless the shock is large. A change from the current ad valorem tax to a similarly low volumetric tax on domestic wine sales causes regional GDP to rise in the cool and warm wine regions, partly offsetting its fall due to the export demand shock, but GDP in the hot wine regions would fall substantially. The switch to a volumetric tax as high as the standard beer rate would raise tax revenue and lower domestic wine consumption by more than one-third. However, it would induce a one-third decrease in production of non-premium wine as its consumer price would rise by at least three-quarters (while the average price of super premium wines would change very little). This would exacerbate the difference in effects of a tax reform on GDP in hot versus warm and cool wine regions.
Description:
The article discusses the study which examines the impact of the adoption of genetically modified (GM) cotton on the global economy and on the developing countries. The standard GTAP (Global Trade Analysis Project) model of the global economy is used in the study to provide insights into the effects of governments allowing GM technology adoption in some countries without, and then with cotton trade and subsidy policy reform globally. The researchers conclude that developing country welfare could be enhanced more by allowing GM cotton adoption than by the removal of all cotton subsidies and tariffs. Furthermore, they believe that the study's results support the notion that the gains to developing countries from the Doha Cotton Initiative will be even greater if GM cotton is adopted first.
Description:
FOR many developing countries, especially in Africa and Central Asia, cotton is an important cash crop. It is receiving attention of late because four poor cotton-exporting West African countries (the Cotton-4: Benin, Burkina Faso, Chad and Mali) have demanded that cotton subsidy and import tariff removal be part of the World Trade Organisation’s Doha Development Agenda (DDA). Cotton subsidies are mostly provided by governments in high-income countries, and part of the US cotton subsidy programme has been ruled illegal following a WTO dispute settlement case brought by Brazil. Hence some reform can be expected soon, especially if the DDA is to live up to its name of being a development round (Sumner, 2006). This paper seeks to provide estimates of what is at stake in terms of cotton
Description:
Recent analyses of the possible adverse effects of climate change on agriculture in developing countries have raised food security concerns, especially for farm households who comprise most of the world’s poor and whose crop productivity is expected to fall. The present study uses a global economy-wide model to assess the expected (in some cases positive) effects on temperate zone crop productivity and the upward pressure on farm product prices from yield falls in developing countries. Also modelled is an expected adverse effect of higher temperatures and humidity in the tropics on the productivity of unskilled workers in developing countries. The net effect of those combined shocks on the agricultural sector’s competitiveness in any developing country is an economy-wide empirical matter, since unskilled workers are employed in nonfarm as well as farm activities. Given the degrees of uncertainty about plausible effects of climate change, our modelling accounts for a range of yield productivity and labor shocks. The results provide a range of consequences for international agricultural prices and for national food consumption, net farm income and economic welfare.
Description:
Recent analyses of the possible adverse effects of climate change on agriculture in developing countries have raised food security concerns, especially for farm households who comprise most of the world’s poor and whose crop productivity is expected to fall. The present study uses a global economy-wide model to assess the expected (in some cases positive) effects on temperate zone crop productivity and the upward pressure on farm product prices from yield falls in developing countries. Also modelled is an expected adverse effect of higher temperatures and humidity in the tropics on the productivity of unskilled workers in developing countries. The net effect of those combined shocks on the agricultural sector’s competitiveness in any developing country is an economy-wide empirical matter, since unskilled workers are employed in nonfarm as well as farm activities. Given the degrees of uncertainty about plausible effects of climate change, our modelling accounts for a range of yield productivity and labor shocks. The results provide a range of consequences for international agricultural prices and for national food consumption, net farm income and economic welfare.
Description:
For decades rural Australia has been discriminated against by industrial policies at home and agricultural protectionism abroad. While agricultural export taxation in poor countries had the opposite impact, recent reforms there mean that that offsetting effect on Australia has diminished. There has also been some re-instrumentation of rich-country farm policies away from trade measures. This paper draws on new evidence to examine whether Australian farmers and rural regions are still adversely affected by farm price-distortive policies abroad, using a global and a national economy-wide model. The results vindicate the continuing push by Australia's rural communities for multilateral agricultural trade liberalization.